Bitcoin (BTC) is enjoying what some are calling a “bear market rally” and gained 20% in July, but the price action is still confusing analysts.
As the July monthly close approaches, the Puell Multiple has broken out of its bottom zone, raising hopes that the worst of the losses may be in the past.
The Puell Manifold tries to consolidate the break
The Puell Multiple is one of the best known on-chain Bitcoin metrics. It measures the value of bitcoins mined on a given day compared to the value of those mined in the last 365 days.
The resulting multiple is used to determine whether the coins mined in a day are particularly high or low relative to the year’s average. From there, miners’ profitability can be inferred, along with more general conclusions about how overbought or oversold the market is.
After reaching levels that traditionally accompany macro price bottoms, the Puell Multiple is now heading higher, something traditionally seen at the start of macro price uptrends.
“Based on historical data, the breakout of this zone was accompanied by the gain of bullish momentum on the price chart,” Grizzly, a contributor to on-chain analytics platform CryptoQuant, wrote in one of the “Quicktake” market updates. ” from the signing on July 25.
The Manifold is not the only signal flashing green under current conditions. As Cointelegraph reported, accumulation trends among hodlers are also suggesting that the macro bottom is already in.
“Unprecedented macroeconomic conditions”
Following its surprise relief bounce in the second half of this month, Bitcoin is now near its highest levels in six weeks and far from a new macro low.
As sentiment moves out of the “fear” zone, market watchers point to unique phenomena that continue to make the 2022 bear market extremely difficult to predict with any certainty.
In another of his recent “Quicktake” research articles, CryptoQuant pointed out that even the price trend lines are not acting as normal this time.
In particular, the BTC/USD pair has crossed its realized price level several times in the past few weeks, something that has not happened in previous bear markets.
The realized price is the mean at which BTC supply last moved, and it currently sits just below $22,000.
“Price Realized has signaled market bottoms in previous cycles,” CryptoQuant explained.
“More importantly, the price of bitcoin did not cross the Price Realized threshold during the last two periods (134 days in 2018 and 7 days in 2020). However, since June 13, it has crossed back and forth this level three times, which shows the uniqueness of this cycle due to unprecedented macroeconomic conditions.”
Those conditions, as Cointelegraph reported, have come in the form of forty-year highs in US inflation, runaway rate hikes by the Federal Reserve, and more recently, signs that the US economy has entered a recession.
In addition to the realized price, meanwhile, Bitcoin has formed an unusual relationship with its 200-week moving average (MA) this bear market.
While normally holding it as support with brief dips below, BTC/USD managed to turn the 200-week MA into resistance for the first time in 2022. It currently sits around $22,800, data from Cointelegraph Markets Pro and TradingView.
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