As of the present moment, Bitcoin [BTC] is showing early signs of a potential uptrend, as indicated by the Puell Multiple dropping below 0.4. Concurrently, a golden cross has appeared on the 2-month chart. These signals, combined with on-chain data, hint at the possibility of Bitcoin gearing up for a significant price surge. Scrutinizing the data closely is vital to gauge the readiness of Bitcoin for an upward trajectory.
One key development is the Puell Multiple dipping below 0.4, suggesting that Bitcoin miners are generating lower revenues compared to their historical averages. This observation was highlighted by analyst Ali Martinez on X (previously known as Twitter). Traditionally, this metric has been linked with market bottoms, implying that Bitcoin could be undervalued.
When miners earn less, they are inclined to hold onto their assets rather than sell. This decrease in selling pressure within the market often foreshadows a price recovery.
How are Miners and On-Chain Activity Contributing to the Bullish Thesis?
Despite the decline in miner earnings, Bitcoin’s network activity remains robust. The number of active addresses has risen by 0.93%, reaching a total of 8.24k in the last 24 hours – indicating increased engagement with the network.
This uptick in activity, coupled with miners likely retaining their holdings, paves the way for supply constraints that could propel prices higher.
Miners holding onto their coins while on-chain activity surges typically leads to a decrease in supply. This dynamic could prompt a potential price rally as demand either remains steady or grows.
Golden Cross and Other Technical Signals
On the 2-month chart, Bitcoin has formed a Golden Cross, characterized by the 50-period moving average crossing above the 200-period moving average. This formation is widely regarded as a bullish indicator, particularly on extended timeframes. This suggests that Bitcoin might be entering a prolonged upward trend.
In addition, the Relative Strength Index (RSI) at 51.05 indicates neutral market conditions, leaving room for upward momentum.
Furthermore, the Bollinger Bands appear to be constricting, with Bitcoin nearing the lower band at $57,758.15. This could signify that the asset is oversold and may experience a rebound soon.
Is Bitcoin Poised for a Market Breakout?
With the Puell Multiple hinting at a potential market bottom, the emergence of a Golden Cross, and crucial technical indicators like the RSI and Bollinger Bands aligning with a bullish outlook, Bitcoin might be on the brink of a breakout.
The diminished selling pressure from miners, the uptrend in on-chain activity, and the positive technical signals further substantiate this proposition.