Arithmetic power is one of the most important aspects of Bitcoin's price movement, as the Bitcoin blockchain is the ultimate raison d'etre of Bitcoin.
Although there are a lot of different data in the market for reference, in fact, we have to look at different data together to have a higher credibility and more effective in drawing conclusions.
However, if we look at the Hash Ribbon, we can see that the historical trend shows that those who bought during the Miner Capitulation phase of the miner's capitulation had a good return, and most of the time they even hit the bottom of the range.
Arithmetic in a bear market
Arithmetic power represents the total computing power to process transactions on the Bitcoin blockchain.
When the price of Bitcoin falls, the value of the block incentives received by miners for mining also falls; when mining business profits fall with the price of Bitcoin, the value of the block incentives received by miners for mining also falls; when mining business profits fall with the price of Bitcoin, the value of the block incentives received by miners for mining also falls.More and more miners will stop mining, leading to a drop in arithmetic power。
The mining algorithm adjusts the mining difficulty periodically, depending on the arithmetic power, to maintain the stability of the entire Bitcoin blockchain.
When the power drops, the difficulty will be adjusted downward to encourage miners to resume mining.The math will rebound, and prices will start to rise as more miners come on board.。
Methods of analysis
"Utilizing Bitcoin's computational power. 30MA and 60MA identify the bottom of the market.(miners surrendering)
From the historical data, it can be seen that the number of people who have been in the country for a long time has increased.The best time for bottom fishing is usually in the middle of the miners' surrender period.。
・When the 30MA crosses the 60MA upwards, it means that the miners' capitulation period is almost over and can be expected.The rebound is on.。
・When 30MA is lower than 60MA, a light red area will be created.
・When 30MA is higher than 60MA, a bullish crossover occurs and the area turns dark red.