This year was unique in many ways and created a whole new precedent for technical analysts who could not deal with the unpredictability of the market.
The price of Bitcoin has been slowly falling since May. Since BTC is the main driver of the crypto industry, its highs and lows often determine the direction of all other tokens.
One of the best indicators for those who wanted to predict where the price would go was the Hash Ribbons indicator that compared the total mining capacity to the price of Bitcoin.
When enough miners capitulated, the price usually went up. This year was different.
Miners are competing harder than ever
Despite what many countries are saying about crypto mining, the community and large business owners do not want to give up or even downsize their operations.
Kazakhstan, China, the US, Germany, and many other nations that previously were main hubs for miners all decided to slow down the development of new farms. They cite the immense pressure these facilities put on local power grids.
At the same time, the difficulty kept climbing up, ensuring that miners have to run their machines 24/7 to make decent profits.
When the price started falling in June, margins also contracted, creating a situation where some miners were looking at a long period of working at a loss. Surprisingly, many were fine with such a predicament.
Many miners continued working and sold some of their BTC long positions to cover losses.
It led to a situation where a capitulation in July was supposed to lead to an increase in the price and a reduction of the hash rate. None of it happened.
Miners kept working, and the price went downhill due to multiple scandals and the fallout of the FTX debacle.
Hash Ribbons worked during a stable market
When the crypto industry is doing fine and prices are going up, hash ribbons work as intended.
However, we are entering a new era in the global economy, and new realities may turn out to be too complex and unpredictable for outdated indicators to be insightful.