NewsletterBitcoin Whales Make a Comeback as Markets Adjust to New Phase of Scarcity
Highlights
- Puell Multiple indicator has reached the discount range after a year, indicating that Bitcoin may be undervalued compared to historical averages.
- Reduced miner rewards following the April halving translate to a drop in Bitcoin supply relative to demand.
- Bitcoin whales are buying BTC at current levels, which could precipitate a rally.
Bitcoin whales are taking advantage of the current correction to acquire BTC at discounted rates as the Puell Multiple shows markets are adjusting to a new phase of scarcity after the April 20 halving.
Bitcoin Price Primed For Recovery
BTC has shown weakness since May 21, taking a downward chop, followed by a consolidation before a mid-week cascade. However, the upside potential remains viable amid a sustained bullish momentum.
The BTC/USDT trading pair shows a prevailing bullish outlook on the one-day timeframe as it consolidates along an ascending trendline.
Tailwinds sprout from growing institutional adoption. It follows the landmark Bitcoin spot ETF (exchange-traded funds) approvals and the recent listing of physically backed BTC and Ethereum (ETH) exchange-traded products (ETPs) on the London Stock Exchange (LSE).
Meanwhile, the Puell Multiple indicator has reached the discount range after a year. Researchers at CryptoQuant say investors may interpret this “as a sign that the market is adjusting to a new phase of scarcity, potentially preparing for a rally.”
Bitcoin Market Value Based On Its Mining Activity
The Puell Multiple indicator is a tool that evaluates Bitcoin value based on its mining activity. It is the ratio between daily revenue and the 365-day moving average.
When this indicator reaches the discount range after a year, it typically indicates that the value of Bitcoin may be undervalued compared to historical averages.
This could present a potential buying opportunity for investors who believe that the price of Bitcoin will likely increase in the future.
With reduced mining rewards following the fourth BTC Halving on April 20, Bitcoin miners continue to suffer, until that time when Bitcoin price rises significantly to compensate for this reduction. Dwindling daily revenues for miners after the Bitcoin halving leads to a decrease in the Puell Multiple.
The current range in which the Puell Multiple is quoted confirms Bitcoin price is at a discount. It means the network is potentially cheap.
With reduced supply amid reduced miner revenues, Bitcoin price could recover as demand grows. The drop in the Puell Multiple suggests the market is adjusting to a new phase of scarcity. This is ahead of a possible rally as the long-term moving average takes time to adjust to this new reality.
Bitcoin Whales Make A Comeback
Elsewhere, the buying appetite among BTC whales is coming back. Since March there has been a drop in buying interest. The resumption shows the current price range is a suitable accumulation zone despite the widespread fear.
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more… to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Premium Partners
Delivered every day.
- Insights that move markets
- 100,000 active subscribers
Related Articles
- 8 Best Crypto Exchanges That Accept PayPal Deposits and Withdrawals
- Jerome Powell Speech Today: What To Expect as Fed Ends QT
- Tom Lee’s BitMine Acquires 96,798 ETH Ahead of Ethereum Fusaka Upgrade
- Schiff Predicts ‘Beginning of the End’ for MSTR as Strategy Eases Bitcoin Sell-Off Fears With $1.44B Reserve
- Bitget Launches MONAD Earn With 20% APR, 800K MON Airdrop Campaign
- Dogecoin Price Below $0.15 as Crypto Market Crashes: Will $0.10 Hold?
- Will the Binance Coin Price Rebound as a Key RWA Metric Jumps 99%
- AVAX Price Prediction After Bitwise Files for a Staking ETF — A Rebound Coming?
- Will Chainlink Price Soar to $20 with U.S. Spot ETF Launch?
- Is Pepe Coin Price at Risk After Forming This Bearish Pattern?
- Bitcoin Price Drops to $87K in a Rapid Crash: What Sparked the Sell-Off?
