Bitcoin’s Price Volatility Points to Potential Bullish Trend in Q3: Key Metrics Breakdown
Bitcoin’s price has experienced volatility, dropping to $53,500 due to sell-offs by the German government and Mt. Gox creditors, attracting investor interest. Despite this, the price has since risen to $57,500, demonstrating resilience in on-chain metrics. Notably, major US institutions like BlackRock and Fidelity are investing in Bitcoin ETFs despite the price dip.
An analysis suggests a bullish turn in the market by Q3, with key metrics pointing towards this shift. The Bitcoin Puell Multiple analysis by CryptoQuant indicates a potential end to the current correction phase within the ongoing bull market. Historically, significant drops in the Puell Multiple have preceded strong price rallies, as seen in previous bull cycles.
In June 2024, there was substantial miner capitulation, with profitability decreasing by 7.8% since the April halving event. Daily miner revenue also saw a sharp decline from $78 million to $26 million, highlighting market stress among miners.
While some may prematurely declare the end of the bull market and sell their long-term holdings, a deeper analysis of on-chain data suggests that the current cycle is still in its early stages. Typically, crypto cycles commence post-halving, with an average duration of over 500 days. Given that we are only 79 days post the 2024 BTC halving, there is still significant potential for growth in this bull cycle.
Furthermore, Santiment’s data reveals a decrease of 566,000 non-empty Bitcoin wallets since mid-June, indicating sell-offs by short-term holders amidst market uncertainty. Such reductions, often observed at market bottoms, historically present buying opportunities for patient investors.
Additionally, both the 30-day and 365-day Bitcoin MVRV indicators are currently in the negative zone, signaling an opportune time to purchase Bitcoin. Past instances of this alignment have resulted in substantial returns for investors who entered the market during similar periods.
With various indicators pointing towards a bullish sentiment, including the projected start of a bull run in Q3 2024 based on the Puell Multiple, Bitcoin seems poised for a potential price recovery. However, investors are advised to exercise caution given the ongoing market volatility and regulatory developments. The Puell Multiple indicator has accurately predicted the bottom, bear trap, and peak of BTC in the past three cycles, suggesting a bullish move from the current bear trap level.
