The positive upward trend of Bitcoin [BTC] observed during October and the initial part of November seems to be diminishing. So, what lies ahead for the leading cryptocurrency as we near the end of 2024?
An analysis conducted by CryptoQuant sheds light on potential insights regarding the potential next moves of Bitcoin based on the Puell Multiple. This metric assesses mining revenues in comparison to market trends.
As per the analysis, the Puell Multiple has recently edged closer to its 365-day moving average.
If the Puell Multiple surpasses the moving average threshold, it could indicate the beginning of another substantial bullish phase. This assessment draws on historical data where similar metrics have triggered significant market movements.
Are Bitcoin holders anticipating further gains?
The analysis from CryptoQuant suggests that Bitcoin might see a resurgence in momentum over the forthcoming days or weeks. However, this is just one of the indicators, and market conditions could still undergo alterations in the near future.
For instance, historical patterns have demonstrated that miner revenue is a reliable gauge of market sentiment.
Miners tend to accumulate reserves when they anticipate higher BTC prices to ‘HODL’ and sell at a better value. Recent data on miner reserves indicates that reserves hit their lowest point in 2024 on November 18th.
The drop in miner reserves might suggest a lack of strong motivation to ‘HODL’. Yet, it’s essential to recognize that Bitcoin has been hovering close to its all-time high, potentially motivating miners to offload some of their holdings.
The Dangers of an Unforeseen Market Sell-Off
One plausible reason why miner reserves reached their bottom levels could be due to expectations of a significant market correction following the recent surge. In simpler terms, there’s a growing uncertainty about Bitcoin’s next trajectory.
The Bitcoin fear and greed index reached an extreme value of 90, indicating substantial greed – the highest level in months. Historical data indicates that major corrections often materialize during such periods of extreme market sentiment, raising concerns of a substantial retracement happening unexpectedly.
However, optimism persists, especially amid shifting global liquidity conditions with declining interest rates. Moreover, the recent U.S. elections have brought optimism to the crypto sphere with the incoming administration showing positive sentiments towards the industry.
These factors collectively suggest that the ongoing rally might not have reached its peak yet. Whale investors continue to accumulate, hinting at potential preparations for a significant market shift.
Over the last 24 hours, inflows into large whale accounts surged to over 516,000 BTC, while outflows from whale wallets were relatively lower at just above $471,000.