As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed numerous bull and bear cycles, and I must say, the current state of Bitcoin is intriguing. The confluence of on-chain indicators, historical data, and fundamental factors suggest that we may be on the cusp of a significant price breakout.
Following a six-month period of stagnation, various on-chain signals suggest that Bitcoin could potentially be gearing up for a significant price surge, as per the analysis of experts.
The forecasts suggest that these predictions align with separate expectations of a future bull market due to seasonal influences, implying that Bitcoin is about to shift into one of its best months ever recorded on record.
Bitcoin’s Bottom Signals
According to Amr Taha, who wrote for CryptoQuant, the Puell Multiple of Bitcoin has dropped to 0.4, a level not seen since late 2022 – marking the lowest point in Bitcoin’s previous bear market after the FTX crash.
The Puell multiple is a ratio comparing daily BTC issuance in USD terms to its 365-day moving average. It’s a measure of miner profitability and is often used to spot market tops and bottoms since miner behavior can significantly impact price movements.
The analyst’s note indicates that the Puell Multiple is approaching levels where it has previously suggested favorable buying opportunities. For investors seeking a long-term accumulation phase, the current Puell Multiple being close to 0.4 could be taken as a signal that Bitcoin might be underpriced or nearing its market bottom.
This week, the computational power required to mine a single Bitcoin block reached an unprecedented peak, making it increasingly challenging for miners. At the same time, the value of Bitcoin has dropped significantly and the recent Bitcoin halving in April has substantially decreased the monetary incentives associated with successfully mining a block.
Apart from miner issues, a decrease in the number of active on-chain addresses, similar to levels observed in July 2021 post China’s mining crackdown, as pointed out by CryptoQuant’s Axel Adler Jr., serves as another potential warning sign for the crypto market.
Preparing For October
As an analyst, I’ve observed an interesting shift in the crypto market recently. Specifically, Bitcoin’s average perpetual futures funding rate turned negative on Wednesday, marking the first time since September 2023. In a thriving bull market, such a change could be interpreted as a positive sign according to my analysis.
He expressed his opinion that the market is likely to reach a conclusion within the upcoming two weeks. He doesn’t foresee a significant decline unless an extraordinary and unforeseen incident, or what’s known as a “black swan event,” takes place. Following this, he believes the market should continue to increase and approach the 70K level for further testing.
In a recent announcement made on Tuesday, Bitwise outlined that although Bitcoin often underperforms during September, traditionally it excels in the subsequent two months. For instance, October has historically yielded an average increase of 29.5% for Bitcoin.
At present, central banks are reducing interest rates, a move that generally benefits all financial holdings. Specifically, the European Central Bank reduced its deposit facility rate by an additional 0.12% on Thursday.
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2024-09-13 02:24