As an experienced analyst, I’ve seen my fair share of market volatility and price movements in Bitcoin. While last week’s sharp decline was disheartening for many investors, I believe there are promising signs that the market might be preparing for a potential rebound.
Bitcoins prices have recovered slightly from last week’s decline and are currently holding steady at current market rates. However, Bitcoin remains trapped within a bearish trend unless it manages to close above $60,000. In the near to mid-term, sellers are expected to maintain control over price movements.
Is Bitcoin Preparing To Race Higher?
In light of recent market developments, particularly the significant decline from around $60,000 to hitting a low of $53,500 last week, there’s growing optimism among traders. One trader believes that Bitcoin could be poised for an upswing based on the Puell Multiple indicator. This valuable tool helps assess miner profitability across various price levels by revealing whether it is over or under-valued.
As a researcher closely monitoring the cryptocurrency market using data from CryptoQuant, I’m confident that the recent Bitcoin price drop in the past week represents the climax of the downtrend we’ve seen since June. By examining the Puell Multiple indicator, we can assess whether this correction is nearing its end or if it’s only the beginning. This valuable metric takes into account the market’s buying and selling pressure to provide insights into potential price trends.
In historical contexts, a decline in the indicator may serve as a valuable sign, particularly for traders aiming to identify price bottoms during a bear market. Subsequently, pinpointing the commencement of a bull market cycle becomes an achievable task with such bottoms.
The Puell Multiple indicator is currently decreasing, mirroring past patterns observed in 2016 and 2020 before significant price surges. This trend may signal that the recent market downturn, resulting in massive long position liquidations worth hundreds of millions, is nearing its end. However, it’s important to note that this could be an early indication of a new bull run or merely a short-term recovery within a larger bearish trend.
To date, Bitcoin has remained relatively steady, registering a 7% increase since hitting its lowest point in July 2024. However, despite optimism, the recent fall below the previous lows in May and June 2024 indicates that bearish forces are currently dominating the market.
To continue its upward trajectory, Bitcoin needs to surpass the $60,000 mark according to previous discussion. However, for more cautious investors, a definitive close above $66,000 or $72,000 might indicate a significant trend reversal. In this scenario, Bitcoin could challenge and potentially exceed $73,800 once again.
USDT Liquidity Rising But BTC Supply Spike Deflating Bulls
As an analyst, I’ve observed a noteworthy increase in USDT liquidity during the initial quarter of 2024. Historically, such surges in stablecoin liquidity have often indicated heightened investor interest in riskier assets like Bitcoin and cryptocurrencies.
As a crypto investor, I believe the lack of an immediate price increase could be attributed to the recent surge in supply from the German government selling off their holdings. However, once this excess inventory is absorbed into the market, the upward trend should continue unhindered.
The positive news for Bitcoin bulls is that exchange-traded fund (ETF) providers have been purchasing Bitcoin as Germany disposes of it. According to SosoValue’s data from July 8, these ETF issuers collectively acquired $294 million in Bitcoin, with BlackRock being the largest buyer.
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2024-07-10 02:41