Bitcoin (BTC) is enjoying what some are calling a “bear market rally” and has gained 20% in July, but price action continues to confound analysts.
As the month end for July approaches, the Puell Multiple has left its bottom zone, leading to hope that the worst of the losses may be in the past.
Puell Several attempts to cement breakouts
Puell Multiple one of the most famous Bitcoin metrics on the chain. It measures the value of bitcoins mined on a given day compared to the value of those mined over the past 365 days.
The resulting multiple is used to determine whether a day̵[ads1]7;s mined coins are particularly high or low relative to the year’s average. From that, miner profitability can be derived, along with more general conclusions about how overbought or oversold the market is.
Having reached levels that traditionally accompany macro price bottoms, the Puell Multiple is now aiming higher – which is traditionally seen at the start of macro price rises.
“Based on historical data, the breakout from this zone was accompanied by gaining bullish momentum in the price chart,” Grizzly, a contributor at chain analysis platform CryptoQuant, wrote in one of his firm’s “Quicktake” market updates on July 25.
Multiple is not the only signal flashing green under current conditions. As Cointelegraph reported, accumulation trends among hodlers also suggest that the macro bottom is already in.
“Outstanding macroeconomic conditions”
After the surprise relief in the second half of this month, Bitcoin is now near six-week highs and far from a new macro low.
Related: Bitcoin futures data shows ‘better’ mood despite -31% GBTC premium
As sentiment leaves the “fear” zone, market watchers point to unique phenomena that continue to make the 2022 bear market extremely difficult to predict with certainty.
In another of its recent “Quicktake” surveys, CryptoQuant noted that even price trend lines are not functioning as normal this time around.
In particular, BTC/USD has crossed the realized price level several times in recent weeks, which did not happen in previous bear markets.
Realized price is the average that the BTC supply last moved to, and is currently just below $22,000.
“The realized price has signaled the market bottom in previous cycles,” explained CryptoQuant.
“More importantly, the bitcoin price did not cross the realized price threshold during the last two periods (134 days in 2018 and 7 days in 2020). However, since June 13, it has crossed this level back and forth three times, which shows the uniqueness of this cycle due to unprecedented macroeconomic conditions.”
These conditions, as Cointelegraph reported, have come in the form of forty-year high inflation in the US, steep interest rate hikes by the Federal Reserve and, most recently, signals that the US economy has entered a recession.
In addition to realized price, Bitcoin meanwhile has formed an unusual relationship with its 200-week moving average (MA) this bear market.
While normally holding it as support with short dips below, BTC/USD managed to turn the 200-week MA into resistance for the first time in 2022. It is currently around $22,800, data from Cointelegraph Markets Pro and TradingView show.
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