A popular Bitcoin indicator is nearing a level that signals a potential buying opportunity for the cryptocurrency, according to a crypto analyst. The Puell Multiple index, which tracks miner selling activity, is approaching a threshold that has historically been associated with favorable buying conditions.
CryptoQuant contributor Grizzly explained in an Aug. 31 analyst note that when the Puell Multiple drops below 0.6, it often indicates a good time for investors to dollar-cost average (DCA) into Bitcoin. “The Puell Multiple index is fluctuating between these two critical levels. If historical patterns hold, a bearish scenario where the index drops below 0.6 could once again signal a favorable buying opportunity for investors,” Grizzly stated.
The range between 0.6 and 0.8 on the Puell Multiple index is known as the “Decision Zone.” Historical data dating back to 2014 shows that when the index falls below 0.6, it has often signaled an ideal opportunity for buying Bitcoin.
Traders use the Puell Multiple to gauge the health of miner revenues. A high Puell Multiple might suggest low sell pressure, while a low Puell Multiple may indicate high sell pressure. At the time of writing, the Puell Multiple is reading a score of 0.69, according to Bitbo data.
Pseudonymous crypto analyst Moustache echoed Grizzly’s sentiment, telling their 133,100 X followers that the Puell Multiple is signaling one of the best opportunities to buy in over two years. “I call it here: This is your second best chance after 2022 to re-accumulate before the next wave starts,” Moustache declared.
However, the question of how long Bitcoin will remain in this uncertain range is debated among traders. Pseudonymous crypto trader Rekt Capital believes there is a possibility that Bitcoin could “breakout” of its reaccumulation range as early as “late September.” However, Rekt also believes it is more likely Bitcoin will “consolidate” through September before an “October breakout.”
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.
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