Bitcoin Bull Run Potential Amid Market Uncertainty
Bitcoin: Signs of Bull Run, but Not Everything is Rosy with BTC
Bitcoin is showing signs of a possible bull run, but the market sentiment suggests the opposite. The Puell Multiple of Bitcoin, an indicator for potential price increases, indicates a possible rally. However, current market sentiments suggest otherwise.
The Puell Multiple and Its Significance
The daily Puell Multiple of Bitcoin is trying to rise above its 365-day average. Historically, this has often preceded an increase in the value of BTC. The Puell Multiple measures the ratio of daily mined BTC to the 365-day average price. If it returns a high value (above 4), miners make profits above their typical costs and may tend to sell a portion of their holdings, putting pressure on the price. Conversely, a low Puell Multiple (below 0.5) signals that miners are struggling with low profits and are more likely to hold onto their coins to avoid losses.
No Rally in Sight in the Short Term
Although many have predicted a rally above $50,000 following the ETF approval, BTC reached a high of $48,625 on January 11 and has since recorded a downtrend. The leading coin is trading at $40,918 at the time of the press release, representing a 16% decrease in the last ten days. In addition, the impending crossing of the daily Puell Multiple above the 365-day average suggests the possibility of a rally. However, the low trading volume of the past week suggests that this may not be possible in the short term.
Negative Market Sentiment
An evaluation of the coin’s daily trading volume based on a seven-day average shows that it has dropped by 35% since January 14. Data from Santiment indicates that the low trading activity may be due to the negative weighted sentiment that the coin has tracked since the ETF introduction. The weighted sentiment value of BTC was -0.494 at the time of the press release. Furthermore, readings from the coin’s daily price chart showed that it has been in a bear cycle since January 12, when its MACD line crossed below the trendline and returned negative values.
Despite the signs of a possible bull run in Bitcoin, current market conditions and sentiments suggest that a potential price increase could be postponed until sentiment improves and bulls attempt to regain control of the market.
Sources: CryptoQuant, CoinMarketCap, Santiment, TradingView