Bitcoin Hash Ribbons Flash First Buy Signal Since $25K BTC Price

Cryptocurrency

Summary:

BTC price is “going a lot higher,” says Capriole Investments, and hodlers may not need to wait for Summer to be over for sky-high BTC price gains.

Bitcoin is headed “a lot higher” as a classic on-chain metric calls for the resumption of the bull run.

In its latest update on June 4, quantitative Bitcoin and digital asset fund Capriole Investments revealed “tempting” signals from the hash ribbons metric.

Capriole’s Edwards: “Hash Ribbons is back”

Bitcoin miners have been forced to readjust since April’s block subsidy halving, and hash rate — the estimated aggregate processing power they dedicate to the network — confirms it.

After hitting all-time highs in March, the Bitcoin mining hash rate has cooled and is currently consolidating lower. For Capriole founder Charles Edwards, this is standard behavior as miners conform to a new economic reality.

The result is Bitcoin’s Hash Ribbons dropping into a new “capitulation” phase — a classic, if controversial, BTC buy signal.

“Hash Ribbons is back,” he summarized.

“Perhaps the best long-term Bitcoin buy signal there is, Hash Ribbons is now tempting us with the current Miner Capitulation which started two weeks ago.”

The metric measures the 60-day moving average of hash rate against its 30-day equivalent. Capitulation occurs when the latter drops below the former, signaling a slowdown.

“You will often see Miner Capitulations sync with shuttering of miner operations, bankruptcies and takeovers. As in the current instance, they also often sync with the Bitcoin Halvings,” Edward explained.

“The Bitcoin Halving means that old, inefficient mining hardware becomes obsolete and no longer profitable to run (costs exceed revenue from the block reward). These mining rigs will typically then be phased out over several weeks following the Halving resulting in falling hash rates. Just as we are seeing today.”

Bitcoin Hash Ribbons chart. Source: Charles Edwards

Continuing, Capriole highlighted a relationship between hash ribbons weakness and broader corrective BTC price conditions. In the long term, however, such periods are followed by protracted upside.

The last capitulation event occurred in August 2023, when BTC/USD traded at around $25,000.

“Hash Ribbons signals are either loved or ridiculed. Every occurrence brings some debate about their relevance today, or why the current signal perhaps doesn’t count,” Edwards wrote.

“This also happened in 2023, but price was also trading in the $20Ks when the last Hash Ribbon buy signal occurred, suggesting this metric still has incredible predictive power today.”

Data hints BTC price “going a lot higher”

As Cointelegraph continues to report, various on-chain indicators are flashing rare bull signals even after nearly three months of BTC price consolidation.

Other analysis sees a classic post-halving “reaccumulation phase” in progress — something which again chimes with historical norms and typically results in upside continuation.

Overall geopolitical and macroeconomic conditions also favor crypto, Edwards says.

“This update we have incredible confluence of technicals and fundamentals which suggest Bitcoin is going a lot higher,” he concluded.

“We are currently entering the summer months, typically a financial lull, so it may take some time to kick start the next impulse up, but given the data on hand that is also not a necessity.”

BTC/USD chart with Fibonacci retracement levels (screenshot). Source: Capriole

Source: Cointelegraph

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Warren Takunda

Commodity

The cartel has had to 'make room for the rising output of others,' analyst notes

Assuming domestic oil production has reached its limit for now, the U.S. could pose less of a threat to OPEC+ market share moving forward.

Instead, it is the potential for weaker-than-expected global energy demand that could end up being the cartel's bigger enemy.

"Two years ago at this time, OPEC+ output was 2.2 million [barrels per day] higher than it is now," noted Bhushan Bahree, executive director at S&P Global Commodity Insights, in emailed commentary. "Total non-OPEC+ crude-oil output is 3.1 million [bpd] higher now, with more than half of that growth coming from the United States alone."

"Put another way," he said, "OPEC+ has had to make room for the rising output of others or face downward pressure on prices."

On Sunday, the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, said that a round of voluntary cuts totaling 2.2 million bpd - including a reduction of 1 million bpd by Saudi Arabia - that were due to expire at the of June would be extended through September. The cuts would then be restored gradually, on a monthly basis, until the end of 2025, though the phaseout can be stopped or reversed depending on market developments.

The decision to gradually unwind supply cuts "reflects ongoing pressure from some members to bring back production and boost the state coffers," wrote economists Konstantinos Venetis and Christopher Granville of TS Lombard.

Market share tug of war

Analysts have cited a number of key reasons behind the latest move by OPEC+.

"Over and above any operational frictions," Saudi Arabia's main priority currently is to support oil prices in the run-up to its $12 billion Aramco share offering, the economists at TS Lombard said.

Still, the "flipside of large OPEC+ supply cuts is solid output growth from non-OPEC producers - not least the U.S., whose exports of crude and crude products have grown briskly over the past couple of years" to surpass 10 million bpd, they wrote.

U.S. oil production last reached a record high of 13.3 million bpd during the week ended Feb. 23, according to data from the Energy Information Administration.

'Flatlined' U.S. output gives Saudis an 'edge'

U.S. output, however, has consistently been at 13.1 million bpd since the week ended March 8. So far this year, the nation's output has been relatively steady, ranging between 13 million bpd and 13.3 million bpd.

U.S. output has "basically flatlined," Phil Flynn, senior market analyst at the Price Futures Group, told MarketWatch. "There's not a lot of signs that U.S. oil producers want to increase production and drilling."

While there seems to be a lot of "merger mania in the shale patch," the reality is that the U.S. government has moved to add more regulations and put more pressure on shale producers, which is likely to restrain the nation's output, he said.

Late last month, Democratic senators called on the Justice Department to "use every tool" at its disposal to prevent and prosecute alleged collusion and price fixing in the oil industry, the Associated Press reported.

With the government accusing oil companies of trying to manipulate oil prices, that's going to make it more difficult for those companies to expand production and meet growing demand, Flynn noted. "Saudi Arabia, of course, has no such restrictions - and that is going to give them an edge in the global race to meet oil demand in the future," he said.

Supply-and-demand risks

Indeed, Saudi Arabia's "conservative stance" on output "suggests an assumption that the U.S. sector will not be able to ramp up volumes at the same rate (if at all) from this year on," according to the economists at TS Lombard.

Such an assumption would be reasonable because of the "well-known financial constraints" on U.S. producers and a "raft of M&A activity in the U.S. shale industry that points to rising odds of a relative restraint in future shale output growth," they said.

All of that would leave the big picture for oil unchanged, the TS Lombard economists added. It would still be a global oil market with "high spare capacity and large-enough inventories to keep shortage fears at bay," they said.

It would take "surprising strength in demand ... to shift and keep the curve higher, and a credible supply scare for geopolitical uncertainty to trigger a lasting spike in prices," they noted. "Right now, neither looks very likely."

Still, Tom Kloza, global head of energy analysis at OPIS (a subsidiary of MarketWatch publisher Dow Jones), believes the actions by OPEC+ "demonstrate that they really don't believe the forecast of the OPEC Secretariat," which suggests demand will outstrip supply in coming months by more than 2.5 million bpd.

"I suppose that they are guilty of predicting what they would like to happen," Kloza said.

Meanwhile, he added that the Atlantic hurricane season has the potential to "alert all of the calculus" - essentially putting a lot of math at play should there be interruptions to U.S. exports or offshore production.

Last month, the U.S. National Oceanic and Atmospheric Administration predicted "above-normal" activity for the June 1 to Nov. 30 Atlantic hurricane season.

Without a hurricane impact, the oil market is likely to see a "summer-to-winter cycle of weaker prices," with the Brent crude benchmark threatening the $70-a-barrel bottom of the $70 to $90 trading range, Kloza said.

On Monday, global benchmark Brent crude saw the August contract settle at $78.36 a barrel on the ICE Futures Europe exchange, the lowest for a front-month contract since early February. U.S. benchmark West Texas Intermediate crude for July delivery settled at $74.22, the lowest since Feb. 7.

Source: Marketwatch

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Alex

Economic

Stocks

The technology sector's dominance over the stock market could finally end later this year, according to Bank of America.

Driven by significant earnings growth, tech-leaning growth stocks have largely been favored over value stocks by investors for years, even when accounting for a painful hiccup during the 2022 bear market.

Bank of America equity strategist Savita Subramanian argued in a Monday note that returns in the stock market could start to broaden out and favor other sectors by the fourth quarter of this year.

"If rates remain high (and we see multiple reasons for higher for longer rates and inflation as we highlight below) we would expect to see a broadening of the S&P 500 with better returns from shorter equity duration vehicles (higher near term cash flows) than from pure, buy-the-dream long duration growth stocks," Subramanian said.

These are the four reasons Subramanian sees tech's dominance waning.

1. It's earnings, not the economy

While low interest rates, excess liquidity, and weak economic growth have been commonly cited as the direct drivers of tech stocks since 2009, it really comes down to earnings.

"Tech out-earned, thus Tech outperformed," Subramanian said.

But earnings growth differentials between tech and non-tech companies are finally beginning to narrow, and that should gain the attention of investors.

"As earnings accelerate outside of Tech, investors will likely become more price sensitive and seek out cheaper earnings growth," Subramanian said.

2. Higher for longer interest rates

"Clearly earnings are the critical driver of outperformance, but higher rates could disproportionately hurt credit sensitive, long duration growth stocks that still trade at lofty premia to higher cash return, shorter duration counterparts," Subramanian explained.

Subramanian said interest rates could continue to move higher, or at least stay higher for longer than most expect, because of waning demand for US 10-year Treasuries from the Federal Reserve and foreign buyers like China and Japan.

Meanwhile, higher nominal GDP growth puts upside pressure on real interest rates, and US sovereign risk evidenced by record levels of debt to GDP suggests a higher required return from Treasury bonds.

3. Current economic cycle favors cyclical leadership

According to Bank of America's proprietary models, both the US and European economies are showing signs of entering the phase 1 "recovery" regime, which has historically favored value stocks over growth stocks.

"Information Technology and Communication Services have lagged in past Recovery regimes" with a 44% hit rate, Subramanian said.

4. Long-term AI beneficiaries might be outside of tech

While technology stocks have been at the heart of the artificial intelligence-induced stock market rally, that could change as the adoption of AI hits saturated levels.

Shares of Nvidia and hyperscalers Microsoft, Amazon, Alphabet, and Meta Platforms have surged as they invest heavily in AI-enabled GPU chips. But those gains could be temporary and the lasting gains could be companies outside of the tech sector that see long-term margin improvements from integrating AI into their business.

"Capex takers within Tech could be transient beneficiaries," Subramanian said, adding that a similar dynamic played out with Rockwell Automation during the COVID-19 pandemic.

"COVID started a 3y ramp in automation spend after which ROK became a core holding of active long only funds, hitting a 20% overweight. ROK is now 60% underweight in the average fund, but capex spenders that grew labor-light have re-rated. Service sectors may be next in the AI disruption train," Subramanian said.

Source:Business Insider

To stay updated on all economic events of today, please check out our Economic calendar

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FastBull Featured

Data Interpretation

On June 3 local time, the Institute for Supply Management (ISM) released the May Manufacturing PMI at 48.7 (April: 49.2, expected: 49.6).

The latest PMI report indicates that the US manufacturing index has slowed for the second consecutive month in May, with the pace of slowdown accelerating. Two of the five sub-indices that directly affect the manufacturing PMI were in expansionary territory.

The New Orders Index remains in contraction at 45.4%, down from April's figure of 49.1%, marking the lowest reading since May 2023. April and May experienced a slowdown compared to the beginning of the year as housing, construction, and capital expenditures activity continued to underperform. The Orders Index is currently at its lowest level in a year, indicating weakening demand in the overall US economy.

The Production Index is at 50.2%, down from the April reading of 51.3%. The Production Index has been in expansion for four out of the last five months. Of the six largest manufacturing sectors, two (Fabricated Metal Products; and Chemical Products) reported increased production.

The Employment Index is at 51.1%, up from the April reading of 48.6%. Of the six big manufacturing sectors, three (Food, Beverage & Tobacco Products; Transportation Equipment; and Chemical Products) expanded employment in May. The improvement in the Employment Index indicates that manufacturers are making better progress in acquiring labor.

The Prices Index is at 57%, down from the April reading of 60.9%, marking the fifth consecutive month of increase. The Prices Index indicated strong expansion in May, but also easing compared to the previous month. Commodity prices continue to increase, especially fuel, natural gas, aluminum, and plastics. Steel is showing signs of weakness. Despite the Prices Index for materials and other inputs falling compared to April, it is still the second-highest level in approximately two years.

The May PMI report indicates signs of a gradual economic slowdown. Following the ISM's release of PMI data, the Atlanta Fed's GDPNow model lowered its economic growth estimate to 1.8%, whereas the growth rate had been expected to remain above 2% prior to May.

Cost pressures continue to increase, with inflation in this area reaching its highest level in over a year. Although output prices rose at a slower pace in May, this is unlikely to persist if cost burdens increase further in the coming months.

May PMI Report

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Swissquote

Stocks

Commodity

GameStop rallied nearly 90% after Keith Gill, aka Roaring Kitty on Twitter, posted a screenshot on Reddit showing a big stake in option positions (about 120'000 call options that would give him the right to buy 12 mio GameStop shares for $20 each before June 21st). The holdings are unverified and no one knows if Roaring Kitty has any of these positions in hand, but it doesn't really matter; the only thought that this could be true sent GameStop 90% higher before closing the session 21% up yesterday.

Other meme stocks that have their names tied to GameStop-led meme craze like AMC, Beyond Meat, Blackberry and Reddit also benefited from the positive vibes yesterday. E*Trade said they would ban Keith Gill from their platform and the SEC explores possible market manipulation.

Fundamentally, a common denominator between the meme stocks is that they are not profitable companies, therefore the stock rallies don't have a solid funding. If history is any indication, this wave will also quickly fade. When GameStop will reveal its Q1 earnings later this month, there is a chance that we have a confirmation that the rally is based on nothing beyond an impressive talent to move crowds into a trade.

On a side note, we originally had thought that the meme craze was fueled by a combination of low pandemic rates, piling up savings and bored traders (who were stuck home due to pandemic restrictions). But it turns out that all these factors are no longer valid. What's also interesting is, thirst for dangerous trades is also visible in a relatively high interest for penny stocks. Finimize reports that 7 out of 10 most traded stocks in the US last month were worth less than $1 a share.

So that means, to me, that there is still too much liquidity in the system. And there probably is. The Fed's balance sheet for example is worth more than $7 trillion today, whereas it was worth around $4 trillion before the pandemic and less than a trillion before the subprime crisis. Bad news is, the Fed is unwinding its balance sheet as a part of its policy tightening policy. Good news is, the Fed said it will start slowing the pace of the balance sheet unwind – for I don't know why, because that means that the balance sheet will never ever normalize. But the result is that, the financial markets do benefit from the still-ample liquidity despite the relatively high interest rates.

Beyond meme stocks

US yields fell on Monday after the latest ISM manufacturing data showed an unexpected acceleration in contraction in May as prices eased. The combination of faster-than-expected contraction and slower-than-expected price pressures fueled the expectations that the Federal Reserve (Fed) could – eventually – cut rates by the end of the year. The US 2-year yield fell to 4.80%, down from 5% tested at the end of last month, the 10-year tipped a toe below the 4.40% and the US dollar index sank below its 100 and 200-DMA. The softer dollar sent the EURUSD above the 1.09 resistance, Cable rallied past the 1.28 as the USDJPY eased.

All eyes are on US jobs data this week. Soft data should further fuel the dovish Fed expectations.

Lower yields didn't necessarily translate into gains for the major US indices. The S&P500 remained under pressure before paring gains into the close and eked out a small 0.11% gain only. The tech-heavy Nasdaq gained 0.35%. Nvidia led gains. The stock rallied almost 5% yesterday as its CEO showcased new generations of AI chips at an event in Taipei.

Note that Nvidia also announced last week that it would be upgrading its AI accelerators every year instead of every two years, and its new Rubin chip comes just three months after the Blackwell chip, revealed in March. The risinf speed of development is a robust sign that demand for AI is not slowing and the company is doing its best to stay on top of its game. Interestingly, at the same event, AMD also revealed its new chips – less than 2 months after the company's last announcement. Alas, AMD dropped 2% on the news.

Elsewhere, crude oil had a rough session. The barrel of crude went on a free fall, cleared the a critical support at $75pb level and is trading near the $73.50pb this morning. OPEC's plans to wind down supply cuts after the Q3, combined with a soft US data weighed heavier than the rising Fed cut bets. From a technical perspective, US crude is now at the limit of oversold market conditions and a positive correction is healthy at the current levels. Next support is seen at $72pb (a minor Fibonacci level) and the key resistance stands at $75pb.

Risk Warnings and Disclaimers

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Samantha Luan

Economic

Stocks

Chinese companies are rushing to take advantage of a recent equities rebound to raise funds, using what may be a narrow window before the market falters again.

Mining company MMG Ltd. proposed a rights offering in Hong Kong to raise HK$9.08 billion ($1.2 billion), while Yankuang Energy Group is eyeing $634 million in a shares placement. Separately, Poly Developments and Holdings Group is considering raising as much as 12 billion yuan ($1.7 billion) via notes that can be turned into equity.

The firms join other Chinese companies seeking to raise cheap funding through equity or equity-linked notes following signs of life in the country’s stock market. The additional issuances are a bright spot for bankers, who have seen mergers and acquisitions and initial public offerings dry up.

Yankuang’s placement is the largest by a Hong Kong-listed firm since April 2023, when sportswear developer Anta Sports Products Ltd. raised $1.5 billion through a similar offering, according to data compiled by Bloomberg. Boosted by Yankuang, share sales by Hong Kong-listed companies jumped to $1.7 billion this quarter, already the highest in a year. Chinese Stock Rebound Sparks Rush of Firms to Raise Funds_1

Chinese Stock Rebound Sparks Rush of Firms to Raise Funds_1

Chinese companies have also been tapping convertible bonds at a record pace as they give firms the flexibility to raise funds cheaply without immediate stock dilution, at interest rates that are usually lower than on regular debt. Alibaba Group Holding Ltd. and JD.com Inc. raised $7 billion together through the tool last month.

“Chinese companies are trying to ride on the positive momentum to raise money they need as we see enthusiasm over the Chinese market now,” said Kenny Ng, a strategist at China Everbright Securities International. On convertibles, he said the onshore market has an extra benefit as the cost there is even cheaper with lower interest rates.

Poly’s offering, if it happens, will be rare in that only three Chinese real estate firms have raised over $1 billion through a convertible over the past twenty years, Bloomberg data show.

Chinese Stock Rebound Sparks Rush of Firms to Raise Funds_2

Fund-raising efforts may gather pace as signs of cooling momentum in the Chinese stock rebound spur a sense of urgency to firms. Companies need to capitalize on a rally that may well reverse given investors’ concerns about the country’s policy uncertainties and geopolitical risks.

The CSI 300 Index for mainland shares has slipped after rallying about 16% through mid-May from this year’s low. The Hang Seng China Enterprises Index has also failed to extend gains following a near 40% trough-to-peak advance.

Some hedge funds have taken profit following a rally in property developer stocks while others have built short positions, according to JPMorgan Chase & Co.

A Bloomberg Intelligence stock index of developers surged more than 70% over the month through May 17, when Beijing unveiled a housing rescue package that included cutting mortgage rates and down-payments. The gauge fell in the following two weeks as doubts emerged on the potency of the measures.

“If the equity rally of the China property sector continues, which is a big if, we might see more developers tapping the CB market,” said Zerlina Zeng, senior credit analyst at Creditsights Singapore LLC.

Source:Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

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Glendon

Economic

DocuSign (DOCU), the pioneering e-signature and agreement cloud company, reported its fiscal Q1 2025 earnings on June 6, 2024, after the market close. Investors and analysts were eager to see if DocuSign could maintain its growth trajectory after a strong previous quarter. Let's delve into the details of the report and analyze what it means for the company's future.

Meeting (or Beating) Expectations?

Analysts' pre-earnings forecasts predicted DocuSign's Q1 revenue to reach $707.7 million, representing a 7% year-over-year increase. The company surpassed these expectations, reporting revenue of $712.4 million. This indicates continued growth, albeit at a slightly slower pace compared to the 12.3% increase seen in the same quarter of the previous year.

Earnings per Share (EPS) Paint a Different Picture

While revenue met expectations, EPS fell short. Analysts anticipated an EPS of $0.79, but DocuSign reported a lower EPS of $0.20. This significant difference could be due to factors like increased expenses or one-time charges not previously factored into analyst estimates.

Investor Reaction: A Mixed Bag

DocuSign's stock price initially dipped slightly in after-hours trading following the earnings report. This could be attributed to the lower-than-expected EPS. However, the company's revenue growth might signal long-term potential, and the stock price has since recovered somewhat.

Key Takeaways from the Report

Revenue Growth: DocuSign continues to experience revenue growth, albeit at a slower pace than the previous year. This suggests the company is still expanding its reach in the e-signature market.

Lower EPS: The lower-than-expected EPS raises questions about DocuSign's profitability. Investors will be looking for explanations from the company's management team.

Future Outlook: DocuSign has not yet provided official guidance for the rest of fiscal 2025. The company's future earnings calls and investor communications will be crucial in understanding its growth trajectory.

What to Watch Out For Going Forward

Several factors will influence DocuSign's future performance:

Competition: The e-signature market is becoming increasingly competitive. DocuSign needs to maintain its innovation edge and expand its product offerings to stay ahead.

Adoption in New Markets: DocuSign can potentially unlock further growth by expanding its services into new industries and geographic regions.

Integration with Existing Workflows: Integrating DocuSign seamlessly with existing business workflows will be critical for wider adoption.

Analyst Opinions: Divided But Mostly Bullish

Analyst opinions on DocuSign's future are somewhat divided. While some might be concerned about the lower EPS, many remain bullish on the company's long-term prospects due to its dominant market position and the overall growth potential of the e-signature market.

DocuSign Q1 Earnings: A Sign of Maturation?

DocuSign's Q1 earnings report suggests the company might be entering a phase of slower but more sustainable growth. The focus might be shifting from rapid user acquisition to increasing profitability and value for existing customers.

Should You Invest in DocuSign?

The decision to invest in DocuSign depends on your individual investment goals and risk tolerance. The company's future success hinges on its ability to navigate a competitive landscape, innovate, and expand its market reach.

Conducting further research is crucial before making any investment decisions. Consider factors like the overall e-signature market trends, DocuSign's competitive landscape, and the company's long-term growth plans.

DocuSign's Q1 earnings report provided valuable insights, but it's just one piece of the puzzle. Continued analysis and monitoring of the company's performance will be essential to determine if DocuSign can maintain its position as a leader in the e-signature revolution.

To stay updated on all economic events of today, please check out our Economic calendar

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Bitcoin Hash Ribbons Flash First Buy Signal Since $25K BTC Price

Capriole’s Edwards: “Hash Ribbons is back”

Bitcoin Hash Ribbons chart. Source: Charles Edwards