Bitcoin Whales Make a Comeback as Markets Adjust to New Phase of Scarcity - August 2024

As a seasoned crypto investor with a few years under my belt, I’ve witnessed the market’s ebb and flow. I’ve seen bull runs and bear markets, and I’ve learned to read between the lines of various indicators. And right now, I believe Bitcoin is primed for recovery.

Bitcoin large investors, referred to as “whales,” are seizing the opportunity presented by the recent market downturn to purchase Bitcoin at reduced costs. The Puell Multiple indicator suggests that the market is readjusting to a period of increased scarcity following the May 2020 halving event.

Bitcoin Price Primed For Recovery

Bitcoinhas displayed a declining trend since May 21, marked by a significant drop followed by a period of stabilization. Yet, the possibility for gains persists due to the ongoing bullish market conditions.

On the one-day chart, the Bitcoin-Tether trading pair exhibits a predominantly optimistic perspective, with price action accumulating near a rising trendline.

Bitcoin Whales Make a Comeback as Markets Adjust to New Phase of Scarcity

As an analyst, I would describe it this way: Institutions are fueling the growth of Tailwinds. This trend is evident in the approval of Bitcoin’s spot ETF in the United States and the recent listing of physically-backed Bitcoin and Ethereum ETPs on the London Stock Exchange. These developments underscore the increasing institutional interest and acceptance of digital assets as a legitimate investment class.

As a researcher studying the cryptocurrency market, I’ve noticed an intriguing development with the Puell Multiple indicator. After a year, this metric has entered the discount range. According to my analysis using CryptoQuant’s data, this could be seen as a signal that the market is readjusting itself in response to changing scarcity levels. It’s possible that investors might interpret this shift as a precursor to a new bullish phase.

Bitcoin Market Value Based On Its Mining Activity

As a Bitcoin analyst, I utilize the Puell Multiple indicator to assess the cryptocurrency’s value in relation to its mining activity. This tool calculates the ratio by dividing the daily revenue from mining by the 365-day moving average.

As a seasoned crypto investor, I’ve learned that when this specific indicator dips into the discount zone after a full year, it often signals that the price of Bitcoin might be underestimated relative to its past trends.

For those who have faith in Bitcoin’s future price growth, this situation might offer an appealing purchasing chance.

As a researcher studying the Bitcoin market, I’ve observed that the fourth Bitcoin halving on April 20th, 2020, resulted in decreased mining rewards for Bitcoin miners. Consequently, their daily revenues have been dwindling due to this reduction. This trend has led to a decrease in the Puell Multiple – an important metric used to gauge the relative buying and selling pressure within the Bitcoin network.

Bitcoin Whales Make a Comeback as Markets Adjust to New Phase of Scarcity

In simpler terms, when the Puell Multiple is within its present range, it indicates that the Bitcoin price may be undervalued. Essentially, the Bitcoin network could be considered a bargain.

As a crypto investor, I believe that with the current reduction in Bitcoin’s supply and decreased revenues for miners, the price could bounce back as demand picks up. The Puell Multiple, an indicator of market sentiment based on the relation between the daily production value and the moving average of the daily production value over a longer period, has dropped, signaling that the market is readjusting to this new phase of scarcity. However, it’s important to note that the long-term moving average takes time to catch up with this new reality, so we might be in for a waiting game before witnessing a potential rally.