Bitcoin (BTC) has been enjoying what some are calling a “bear market rally” and gained 20% in July, but the price action continues to confuse analysts.
Towards the monthly close of July, the Puell Multiple left its lower zone, raising hopes that the worst of the losses may be over.
Puell Multiple attempts to secure progress
The Puell Multiple is one of the most famous on-chain bitcoin metrics. It measures the value of bitcoins mined on a given day compared to the value of those mined in the past 365 days.
The resulting multiple is used to determine whether the number of medals achieved during the day is very high or low compared to the average for the year. The profitability of the miners can be drawn from this, as well as more general conclusions about the extent of overbought or oversold in the market.
After hitting the levels traditionally associated with the macro-lows, the Puell Multiple is now aiming higher, which is traditionally seen at the start of macro-upgrades.
“Based on historical data, the departure from this zone was accompanied by bullish momentum in the price chart,” wrote Grizzly, a contributor to the CryptoQuant chain analysis platform, in one market updateQuick quickfrom the company on 25 July.
Plural is not the only sign that is flashing green under the current conditions. As Cointelegraph reported, cumulative trends among conservatives also suggest that the macro bottom is already in place.
“Unprecedented macroeconomic conditions”
After its surprising rebound in the second half of the month, bitcoin is now close to six-week highs and far from a new macro low.
Also Read: Bitcoin Futures Data Shows Improved Mood Despite 31% Premium on GBTC
As sentiment moves out of the “fear” zone, market watchers point to unique phenomena that make the 2022 bear market extremely difficult to predict with certainty.
In another of its recent “Quicktake” research papers, CryptoQuant noted that even price trends are not behaving normally this time around.
In particular, the BTC / USD pair has repeatedly breached its realized price level in the past few weeks, which has not happened in previous bear markets.
The realized price is the average at which BTC supply last moved, and is currently just below $22,000.
“The realized price indicated market lows in previous cycles,” CryptoQuant explains.
“More importantly, the price of bitcoin has not exceeded the realized price threshold in the last two time periods (134 days in 2018 and 7 days in 2020). But, since June 13, it has crossed this level three times, reflecting the uniqueness of this cycle due to unprecedented macroeconomic conditions.
These conditions, as reported by Cointelegraph, are in the form of forty-year high inflation in the United States, rampant rate hikes by the Federal Reserve and, more recently, signs that the US economy is heading into recession.
In addition to price realization, bitcoin has formed an unusual relationship with its 200-week moving average (MA) during this bear market.
Although it usually holds it as support with short dips below, the BTC/USD pair managed to turn the 200-week moving average into resistance for the first time in 2022. It currently sits around $22,800, according to data from Cointelegraph Markets Pro and TradingView .
Although it usually holds it as support with brief dips below it, BTC/USD managed to flip through the 200-week moving average for the first time in 2022. It currently sits around $22,800, according to data from Cointelegraph Markets Pro and TradingView.
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