Bitcoin (BTC) is currently exhibiting several bullish signs that could signal a significant price move in the near future. At the time of writing, the cryptocurrency is showcasing a potential rally with the Puell Multiple dropping below 0.4 and a Golden Cross forming on the 2-month chart. These indicators, when analyzed in conjunction with on-chain data, suggest that Bitcoin might be preparing for a major upward swing.
Puell Multiple And Miner Earnings – A Bullish Signal?
The Puell Multiple, a metric that tracks Bitcoin miners’ earnings relative to their historical average, has recently dipped below 0.4. This decrease indicates that miners are earning significantly less than their typical revenue. According to analyst Ali Martinez on X (formerly Twitter), such a low Puell Multiple is historically associated with market bottoms. This could imply that Bitcoin is currently undervalued and poised for a price increase.
When miners earn less, they tend to hold onto their Bitcoin rather than selling it. This reduction in selling pressure often precedes a market rebound. The reduced supply in the market, combined with steady or increasing demand, sets the stage for a potential price rise.
Rising Network Activity Supports the Bullish Case
Despite lower earnings for miners, Bitcoin’s network activity remains robust. In the past 24 hours, active addresses have increased by 0.93%, reaching 8.24k. This uptick in network engagement signals growing interest and participation in Bitcoin’s ecosystem.
Miners holding onto their coins while on-chain activity rises can lead to supply constraints. With fewer Bitcoins available for sale and increasing network activity, the conditions are ripe for a potential price uptick as demand continues to grow.
On the 2-month chart, Bitcoin has formed a Golden Cross, where the 50-period moving average has crossed above the 200-period moving average. This pattern is a classic bullish signal, particularly on longer timeframes, suggesting that Bitcoin may be entering a sustained upward trend.
Additionally, the Relative Strength Index (RSI) is at 51.05, indicating neutral market conditions that allow room for upward movement. Bollinger Bands are also tightening, with Bitcoin nearing the lower band at $57,758.15. This could signal that the asset is currently oversold and may experience a bounce soon.
Also Read: Microstrategy Invests $1.11B In 18,300 Bitcoins, Total Holdings Soar To 244,800 BTC
Is Bitcoin Ready for a Breakout?
The combination of a low Puell Multiple, the formation of a Golden Cross, and supportive technical indicators points towards a potential Bitcoin breakout. Reduced miner selling pressure, rising on-chain activity, and strong technical signals collectively bolster the case for a bullish shift.
As these indicators align, Bitcoin investors and traders should keep a close eye on the market for signs of a significant price movement. If these trends continue, Bitcoin may well be on the cusp of a major rally.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
