The bullish momentum of Bitcoin [BTC] witnessed in October and the initial part of November seems to be waning. So, what lies ahead for the leading cryptocurrency as the year 2024 draws to a close?
An insightful analysis by CryptoQuant sheds light on Bitcoin’s potential next steps based on the Puell Multiple, which gauges mining income in relation to market dynamics.
As per the analysis, the Puell Multiple has recently edged closer to its 365-day moving average.
A breach of the moving average by the Puell Multiple could indicate the start of a significant bull market. This analysis draws parallels from past instances when similar metrics signaled notable market movements.
Can Bitcoin holders anticipate further gains?
According to the CryptoQuant analysis, Bitcoin might witness a resurgence in momentum in the upcoming days or weeks. Nevertheless, this is just one metric, and market conditions could still shift in the near future.
For instance, the historical trend shows that miner revenue is a dependable gauge of market sentiment.
When miners foresee higher BTC prices and are inclined to HODL in anticipation of selling at higher rates, miner reserves typically increase. The latest data on miner reserves reveals a dip to 2024 lows on the 18th of November.
The decline in miner reserves may suggest a lack of strong motivation to hold. However, it is important to note that Bitcoin has been hovering near its all-time high, potentially prompting miners to offload some of their holdings.
The looming threat of an unforeseen market sell-off
Another conceivable reason for the near-bottom levels of miner reserves could be the anticipation of a substantial market correction post the recent upsurge. This suggests a growing element of uncertainty regarding Bitcoin’s future trajectory.
The Bitcoin fear and greed index currently stands at 90, indicating extreme greed and marking one of the highest levels in months. Historically, significant corrections have materialized during extreme greed phases, prompting concerns over a possibly sizable retracement in an unforeseen manner.
On a more positive note, the prevalent optimism is buoyed by evolving global liquidity conditions with decreasing interest rates. Additionally, the recent U.S. elections have fostered positive sentiment in the crypto market with the incoming pro-crypto administration.
Collectively, these aspects hint that the ongoing rally may not signify a peak in the market cycle. Whales are still accumulating assets, hinting at potential preparations for a significant upcoming move.
In the past 24 hours, inflows into prominent holder accounts have surged, totaling more than 516,000 BTC. Conversely, outflows from whale addresses stood at slightly over $471,000.