Bitcoin’s Potential Major Bull Run Supported by Key Indicators
Bitcoin has shown a remarkable resurgence lately, with its value surging by 29% since July 5, reaching a peak of $68,000. This sudden uptick has sparked excitement among investors. Crypto analyst Willy Woo has pointed out crucial macro signals that could drive a bullish trend for Bitcoin. Let’s delve into these indicators and why they are significant.
Miners’ Capitulation & Hash Rate Recovery
Woo has highlighted the end of miner capitulation as a key indicator. Miner capitulation is a phase where miners face significant financial pressure, but Woo suggests that this phase has passed. He observes that the hash rate, which measures the total computing power of the Bitcoin network, is on the rebound.
The introduction of advanced mining hardware like the M66s and S21 Pros is expected to further boost the hash rate, indicating a potential bullish trend. Woo emphasizes that miner capitulation often serves as a reliable bullish signal. Historical data shows that recoveries in the hash rate are typically followed by prolonged bullish periods.
Role of the Puell Multiple
Another metric Woo is closely monitoring is the Puell Multiple, which compares miners’ current profitability to their past revenues. This metric has two critical phases:
– Macro Bottoms: These occur when miner profitability hits rock bottom, signaling a potential reversal.
– Signal Bottom: This phase occurs after Bitcoin’s halving event halves miner earnings, setting the stage for a bull run.
Woo notes that we are currently in the Signal Bottom phase. With miner earnings significantly reduced, the market is primed for a potential bullish shift, making it an opportune time to consider investing in mining stocks.
Global Liquidity On The Rise
On a broader scale, Woo underscores the importance of global liquidity. Typically, when liquidity expands, often through increased money printing, investors tend to turn to risk-on assets like Bitcoin. Early indications suggest that global liquidity may be increasing, further bolstering a positive outlook for Bitcoin.
Potential Bearish Factors
Despite the optimistic signals, Woo also highlights some bearish factors. One concern is the recent influx of Bitcoin into spot exchanges, including a substantial 42,587 BTC transfer from Mt. Gox to new wallets. This surge in supply could impact market dynamics.
Additionally, the imminent launch of the Ethereum spot ETF could lead to capital rotating out of Bitcoin and into Ethereum, potentially affecting Bitcoin’s price.
What’s Next For Bitcoin?
Looking ahead, Woo believes that Bitcoin must surpass the $73,000 mark to trigger a short squeeze, potentially propelling the price to $77,000. Beyond this level, Bitcoin could enter a phase of price discovery with fewer obstacles.
Currently, Bitcoin is trading at $66,613, reflecting a 1% drop in the last 24 hours. Despite this dip, BTC trading volume has surged by 47%, with a market cap of $1.31 trillion.
