The Hash Ribbons indicator measures Bitcoin’s network health by analyzing changes in the mining hash rate over time. It’s calculated by comparing the 30-day and 60-day moving averages of Bitcoin’s hash rate to identify periods of miner capitulation or recovery.

When the short-term hash rate drops significantly below the long-term average, it suggests miners are shutting down equipment due to low profitability, which can weaken market confidence. Conversely, when the hash rate begins to recover and the short-term average crosses back above the long-term average, it often signals improving miner conditions and potential market strength ahead.

The Bitcoin Power Law models Bitcoin’s long-term price trajectory based on historical adoption patterns. It’s calculated by fitting Bitcoin’s price data to a power-law curve that reflects exponential network growth over time.

When Bitcoin’s price trades well below the projected curve, it indicates a potential undervaluation relative to its long-term growth trend. Conversely, when the price trades significantly above the curve, it suggests an overheated market that may face future corrections as it reverts closer to the long-term trajectory.