Bitrabo Editorial
Bitcoin is gradually recovering from last week’s dip, stabilizing at current levels but still confined within a bearish pattern. Unless there is a firm close above $60,000, sellers will continue to influence price movements in the short to medium run.
Could Bitcoin Be Getting Ready for a Surge?
Despite recent events, particularly last week’s significant drop sending BTC tumbling to $53,500, there is a sense of optimism. One trader anticipates a potential upward momentum for Bitcoin, citing the Puell Multiple indicator as a hint. This indicator is essential for evaluating miner profitability across various price levels to determine whether Bitcoin is over or under-valued.
Referring to CryptoQuant data, the analyst is optimistic that the Bitcoin market is bottoming out, with last week’s crash signaling a climactic end to the downward trend in June. The Puell Multiple indicator helps forecast whether a correction is concluding or just beginning.
Historically, a declining Puell Multiple indicator has often acted as a favorable signal for traders seeking to time market bottoms during bearish trends. This pattern makes it easier to identify the beginning of a bullish cycle.
The current decline in the Puell Multiple indicator mirrors the patterns seen in 2016 and 2020 before significant price surges. This trend suggests that the recent downturn, which led to extensive long liquidations, may be coming to an end. Nevertheless, it remains uncertain if the bull run is still in its early stages.
Despite some stability, with Bitcoin rebounding 7% from its July 2024 lows, the breach of the lows set in May and June 2024 last week indicates that bears are currently dominating.
To reignite the uptrend, as mentioned earlier, bulls need to secure a close above $60,000. However, a definitive close beyond $66,000 and $72,000 could signal a significant trend reversal for more conservative traders. In such a scenario, Bitcoin might aim to retest and surpass $73,800.
Increasing USDT Liquidity vs. Rising BTC Supply Posing Challenges for Bulls
Currently, confidence prevails. An analyst highlights a surge in USDT liquidity in early Q3 2024. Typically, a rise in stablecoin liquidity may indicate growing interest in riskier assets like Bitcoin and cryptocurrencies.
The delayed price rise could be attributed to a supply increase as the German government unloads assets. Once this excess supply is absorbed, the uptrend is expected to resume.
Encouraging news for bulls is that spot Bitcoin exchange-traded fund (ETF) issuers are purchasing as Germany divests. According to SosoValue data as of July 8, all spot ETF issuers collectively acquired $294 million worth of BTC, with BlackRock leading the way.