Bitcoin Onchain Indicator Points to $58.5K as Near 'Profitable' Buy Level
Date: 2024-09-02 Author: Oliver Abernathy Categories: CRYPTO PAYMENTS
A popular Bitcoin indicator that traders use to gauge miner activity is approaching a level that signals a promising buying opportunity for Bitcoin, according to a crypto analyst.
"The Puell Multiple fluctuates between two critical levels. If historical patterns hold, a bearish scenario where the index dips below 0.6 could again signal a profitable opportunity for investors," CryptoQuant contributor Grizzly explained in a research note on August 31.
Grizzly explained that the range between 0.6 and 0.8 on the Puell Multiple is known as the "Decision Zone."
He noted that historical data going back to 2014 shows that when the index dips below the 0.6 threshold, it often signals a good opportunity for dollar-cost averaging (DCA) strategies on Bitcoin.
Traders Use the Indicator to Assess Miner Activity
Traders typically use the Puell Multiple to assess the health of miner revenues. For example, a high Puell Multiple may indicate low selling pressure, while a low Puell Multiple may indicate high selling pressure.
At press time, the Puell Multiple is 0.69, according to Bitbo. For reference, when Bitcoin hit an all-time high of $73,679 on March 13, the Puell Multiple was 1.88.
Bitcoin is trading at $58,416 at press time, down 8.98% over the past seven days, according to CoinMarketCap.
Bitcoin is down 9.77% over the past 30 days. Source: CoinMarketCap
Pseudonymous crypto analyst Moustache told his 133,100 X followers that the Puell Multiple signals one of the best buying opportunities in the last two years.
"To put it bluntly: this is your second-best chance after 2022 to re-accumulate before the next wave begins," Moustache said.
How long Bitcoin will remain in this uncertain range, however, is up for debate among traders.
Pseudonymous crypto trader Rekt Capital believes there is a possibility that Bitcoin could "break out" of its re-accumulation range as early as "late September."
However, Rekt believes it is more likely that Bitcoin will "consolidate" throughout September before "breaking out" in October.
