Bitcoin's Hash Ribbon indicator flashed a historically significant miner capitulation signal in late November after the network's hashrate dropped approximately 15% below its all-time high, suggesting unprofitable miners are shutting down operations following a 35% price correction from October's peak.
The metric, which tracks the 30-day and 60-day moving averages of Bitcoin's hashrate, triggered when the shorter timeframe crossed below the longer one- a pattern that has historically aligned with cyclical price bottoms and strong buying opportunities.
Bitcoin fell to $81,000 on November 21 before rebounding to approximately $90,000 following the signal's appearance, replicating a familiar sequence where miner stress precedes price recovery. The Hash Ribbon crossover occurs when mining becomes economically unsustainable for a substantial portion of network participants, forcing them to turn off equipment and potentially sell Bitcoin reserves to cover operational costs. This dynamic creates selling pressure that often marks capitulation phases, after which the network stabilizes and prices typically find support.
The signal arrives as Bitcoin's hashprice - the expected daily value of one terahash per second of mining power - collapsed to $38.2 per petahash per second according to Luxor Technology, marking the lowest level in five years.
The metric has since dropped further to approximately $34-36 per petahash, representing an all-time low as network difficulty remains near record highs while Bitcoin trades roughly 30% below its October all-time high of $126,000. In response to the profit squeeze, major mining companies including Core Scientific, Riot Platforms, Marathon Digital, Hut 8, and IREN have accelerated pivots toward artificial intelligence and high-performance computing infrastructure to diversify revenue streams.
What Happened
The Hash Ribbon indicator uses two moving averages of Bitcoin's hashrate to identify periods of miner capitulation. When the 30-day simple moving average crosses below the 60-day moving average, it signals that mining activity is declining as unprofitable operations shut down equipment. The crossover shows the hashrate remains under pressure and miners are continuing to capitulate, with the capitulation phase typically ending when the 30-day average crosses back above the 60-day measure.
Bitcoin's latest decline saw the cryptocurrency fall 35% from its October all-time high above $126,000 to a low of $81,000 on November 21. The network's hashrate, which measures the total computational power securing the blockchain, remains above 1.1 zettahashes per second on a seven-day moving average despite the recent decline - still near record levels even as profitability has cratered. Mining difficulty reached an all-time high of 156 trillion in early November, up 6.3% from the previous adjustment, creating a challenging environment where miners earn fewer rewards per unit of computing power.
Historical precedents demonstrate the Hash Ribbon's reliability as a cyclical bottom indicator. The signal appeared in May 2021 during China's Bitcoin mining ban, when the price tumbled 50% to $30,000 before recovering. It flashed again in June 2022 and November 2022 during the FTX collapse, with both instances preceding sustained recoveries once miner capitulation concluded. The metric can also generate false signals ahead of downtrends that do not correspond to major bottoms, as occurred in May and July 2025, though these instances remain less common than accurate bottom calls.
Bitcoin's hashprice collapse reflects the convergence of multiple pressures on mining economics. The April 2024 halving reduced block rewards from 6.25 BTC to 3.125 BTC, cutting miner revenue by 50% while network competition remained intense. Transaction fees, which provide supplementary income beyond the block subsidy, have fallen to multi-year lows at approximately 4 satoshis per virtual byte, offering minimal relief. Bitcoin's price decline from October highs eliminated the cushion that had kept many operations profitable, forcing marginal producers to make difficult decisions about continuing operations.
Mining companies have responded to the profit crunch by pivoting toward AI and HPC infrastructure at an unprecedented scale. Core Scientific emerged from bankruptcy restructuring to become a bare-metal AI infrastructure provider, securing a 12-year, $3.5 billion hosting contract with cloud computing firm CoreWeave. IREN signed deals with Microsoft worth an estimated $9.7 billion and Dell Technologies valued at $5.8 billion, while Riot Platforms suspended a 600-megawatt Bitcoin mining facility expansion to repurpose the site for AI data center sales. These transitions leverage miners' existing advantages in power procurement, thermal management, and high-energy-density facilities that can be retrofitted for GPU-intensive AI workloads.
Why It Matters
The Hash Ribbon signal's historical accuracy makes it a closely watched indicator among long-term Bitcoin investors seeking to identify advantageous entry points during market corrections. According to Charles Edwards, the metric's creator, Hash Ribbons have generated 14 buy signals since 2013, with approximately 64% turning profitable assuming exits on the first miner capitulation signal after each purchase. The indicator performed better than a simple buy-and-hold strategy over this period, though back-tested results do not guarantee future performance.
The mechanism underlying the Hash Ribbon's effectiveness relates to forced selling pressure from miners and subsequent recovery. When mining becomes unprofitable, operators face immediate cash flow pressures from electricity bills and equipment financing costs. Miners holding Bitcoin reserves may liquidate to cover operational expenses, creating selling pressure that accelerates price declines. Once unprofitable miners exit the network, difficulty adjusts downward after approximately two weeks, improving economics for remaining participants and reducing sell pressure. This dynamic creates conditions where the network stabilizes and demand can begin absorbing available supply more effectively.
Current market conditions show mixed signals regarding how quickly recovery may materialize. On-chain data indicates miners sold 30,000 BTC in 48 hours during the recent correction - one of the fastest liquidation waves of 2025. However, daily miner outflows have generally declined from 23,000 BTC in February 2025 to as low as 3,672 BTC in November, suggesting that many operators are choosing to hold reserves rather than sell at current prices. Exchange reserves hit seven-year lows at 2.5 million BTC, indicating that coins are moving to cold storage rather than being deposited for sale.
The mining industry's pivot to AI infrastructure represents a structural shift that could have long-term implications for Bitcoin network security and decentralization. If large-scale miners continue routing capital and energy resources toward AI rather than Bitcoin, the network could experience reduced hashrate growth, slower difficulty adjustments, and potentially greater centralization pressure. For now, smaller miners benefit from reduced competition for block rewards, though analysts warn that a prolonged exodus could reshape Bitcoin's mining landscape in ways not seen since China's 2021 mining ban.
The AI transition also creates new business models that may provide more stable cash flows than pure mining operations. AI compute contracts typically span multiple years with fixed pricing, offering predictability that Bitcoin mining cannot match given price volatility and difficulty fluctuations. Companies successfully executing this strategy have seen substantial stock price appreciation, with some mining stocks gaining 100-600% in 2025 as investors reward diversification efforts. Core Scientific's stock surged following its CoreWeave partnership, while IREN shares climbed on Microsoft and Dell announcements.
Final Thoughts
The Hash Ribbon signal's appearance after Bitcoin's 35% correction follows a familiar pattern where miner stress precedes price stabilization and potential recovery. The indicator's track record suggests that patient investors who accumulate during capitulation phases have historically been rewarded, though the timing of recoveries varies and can extend across weeks or months rather than days. Bitcoin's rebound from $81,000 to $90,000 following the signal represents early evidence that demand may be stabilizing, but confirmation will require the 30-day hashrate moving average to cross back above the 60-day measure and price momentum to turn sustainably positive.
The five-year low in hashprice creates an environment where only the most efficient mining operations can remain profitable at current Bitcoin prices. Operators running newest-generation ASICs like Bitmain's S21 series maintain profit margins near 48-58% according to Hashrate Index data, while older equipment models face significantly compressed or negative margins. This dynamic accelerates fleet upgrades and concentrates mining among well-capitalized operators with access to low-cost electricity, typically below $0.05 per kilowatt-hour.
The broader mining industry's pivot to AI infrastructure marks a potential inflection point where Bitcoin mining becomes one revenue stream among several rather than the sole business model. Companies that successfully diversify may prove more resilient during future bear markets, while those remaining pure-play miners face heightened exposure to Bitcoin price volatility and difficulty fluctuations. The transition requires substantial capital for GPU acquisitions, networking infrastructure upgrades, and operational expertise in cloud services—barriers that favor larger, well-funded operations over smaller participants.
Whether the current Hash Ribbon signal marks a definitive cyclical bottom or a temporary pause in a longer correction remains uncertain. Bitcoin still trades 30% below its October highs, with resistance levels at $95,000, $100,000, and the psychological $126,000 all-time high. Support appears to be forming near $80,000-82,000, where U.S. spot Bitcoin ETFs hold average cost basis positions. The outcome will depend on macroeconomic conditions including Federal Reserve policy, regulatory developments under the Trump administration's crypto-friendly stance, and institutional capital flows through spot ETF products.
For miners, the path forward involves balancing Bitcoin mining operations with AI infrastructure opportunities while managing the capital requirements and operational challenges of serving hyperscale technology clients. The industry's transformation from cryptocurrency-focused enterprises to diversified digital infrastructure providers may define the next phase of Bitcoin mining's evolution, with long-term network security implications that will unfold over years rather than quarters.
Read next: Bitcoin Rallies To $90,900 After Jim Cramer’s Bearish Warning — Markets Defy 'Cabal' Claim