These on-chain indicators say the “sideways summer” is over for Bitcoin

After six months of sideways cutting, several on-chain indicators say Bitcoin may finally be ready for an epic price breakout, analysts say.

These predictions would align with separate predictions of an upcoming bull market based on seasonal factors, with Bitcoin soon to move from one of its worst to best months on record.

Bitcoin Bottom Signals

As noted by CryptoQuant author Amr Taha, Bitcoin’s Puell multiple has hit a low of 0.4 for the first time since late 2022, the absolute bottom of Bitcoin’s latest bear market after col· FTX lapse.

The Puell multiple is a ratio that compares BTC’s daily issuance in dollar terms to its 365-day moving average. It is a measure of the profitability of miners and is often used to detect market highs and lows, as the behavior of miners can significantly affect price movements.

“Puell’s multiple is approaching levels where it has historically indicated buying opportunities,” the analyst wrote. “Investors looking for a long-term accumulation phase could interpret the current Puell multiple near 0.4 as a sign that Bitcoin is undervalued, or at least approaching a market bottom.”

Bitcoin’s hash rate hit a new all-time high earlier this week, meaning it’s more competitive than ever for miners to mine a block of Bitcoin. Meanwhile, the decline in BTC prices and the April BTC halving have massively reduced the financial rewards attached to successfully mining a block.

Miners’ problems are not the only bearish signal – another CryptoQuant author – Axel Adler Jr. – he wrote on Thursday, the number of active addresses on the chain has dropped to lows last seen in July 2021, shortly after China’s mining ban.

Preparing for October

Finally, the average funding rate on Bitcoin perpetual futures was negative on Wednesday for the first time since September 2023. In a bull market, Adler says this is a bullish sign.

“I think the market will make a decision in the coming weeks,” he said he said. “I don’t expect a major drop unless a black swan event occurs. After that, we need to go higher and try 70K.”

Bitwise published a note on Tuesday explaining that while Bitcoin typically underperforms in September, the following two months tend to be some of the best performing periods. October, for example, has an average gain of 29.5% for BTC.

Central banks are also cutting interest rates at the moment, which is usually positive for all financial assets. The ECB lowered its deposit facility by another 12 basis points on Thursday.

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