Skip to main content

Quant Explains Why Bitcoin Bull Cycle Is Only In Phase 1

Top Quant uses the puell multiple to point out a pattern that explains why the current Bitcoin bull cycle is only in the first phase.

The Bull Market Is Not Over, Phase 1 Has Just Begun

According to a CryptoQuant analyst, past cycles show that the current Bitcoin bull market isn’t over yet. The puell multiple seems to reveal where the price might head next.

The puell multiple is a BTC indicator used to tell how healthy miners’ revenue is. It’s calculated by dividing the mining revenue by the 365-day moving average (MA) of the same.

Puell Multiple= Mining Revenue USD ÷ 365 MA​ (Mining Revenue USD​)​

With the help of the metric, it becomes possible to say how much selling pressure miners are facing. When the indicator has high values, miner revenue is relatively healthy, thus miners aren’t compelled to sell. While low values could suggest they are facing considerable selling pressure.

Since miners hold large amounts of Bitcoin, significant selling pressure among them could impact the price of the cryptocurrency on a visible scale.

Now, here is how the puell multiple changed during the 2011 and 2013 bull cycles:

The Puell Multiple vs the Bitcoin price during 2011 and 2013

The above graph numbers the different phases of these runs, and the colored zones help reveal the pattern of where the price heads next after touching each.

Related Reading | Why Bitcoin Dominance Could Submit To Altcoin Season Several Months Longer

During a mid-cycle top, the price touches the yellow box. An end-of-cycle top is signaled when the value touches the red zone.

A new cycle doesn’t start until after a mid-cycle top post halving is reached. The below chart shows how the 2017 bull run looked like as well as how the current one may end up looking like:

The current Bitcoin bull run has just begun

Examining this graph makes it clear that the 2017 cycle also followed a similar pattern for the price vs puell multiple chart.

Related Reading | Bitcoin Mempool Shows Low Demand?, Why Bears Could Stage A Comeback

Now, based on this pattern, it looks like the current bull run may only be in the first phase. If a similar trend continues to be followed, BTC should make a large move up next as the coin hits a new ATH.

Bitcoin Price

At the time of writing, BTC’s price floats around $47.8k, down 1.5% in the last 7 days. Over the past month, the coin has accumulated 15% in gains.

Here is a chart for the trend in Bitcoin’s value over the past three months:

BTC continues on an overall downtrend | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from CryptoQuant, TradingView.com

from NewsBTC https://ift.tt/3ywEc3s
via IFTTT
Labels:

Comments

Post a Comment

Any questions, Please.

Popular posts from this blog

DeFi isn’t dead, it just needs to fix these 3 critical problems

It’s been a rough year for DeFi, and it may not get any better until projects focus more on security, regulation and usability. The persistent challenges  decentralized finance  face have been well documented by a handful of analysts and the recent collapse of the Terra ecosystem re-enforced the fact that something is critically wrong with DeFi. I think DeFi today is completely broken for 99% of the population. The promise of a more transparent financial system has been overtaken by greed. UST/LUNA is just the latest in a string of bad developments: — Peter Yang (@petergyang) May 11, 2022 Let's take a look at what experts say DeFi needs to do in order to have another revival.  Improved usability To date, the promise of open and uncensored access to a global decentralized financial system has been largely hampered by the complicated interface, confusing multi-step staking processes and lack of clarity surrounding the yields on various tokens. What do you thi...
Post a Comment
Read more

ENS DAO delegates offer perspective on DAO governance and decentralized identity

AlphaWallet CEO and Spruce co-founder talk about their roles as contributors to the Ethereum Name Service following the project's recent airdrop. Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community.  Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers. Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for  resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. Alpha...
Post a Comment
Read more

Institutional demand for crypto isn’t subsiding, but impact will be gradual

As another $2-trillion stimulus package looms in the U.S., institutions will continue to look at BTC as a hedge against inflation. For example, just last week, when the currency was hovering around the $30,000 threshold, a whole host of pundits was warning investors to brace for impact, suggesting that the premier crypto asset was on the verge of a correction and could once again dip to around the $20,000 region. However, in just one day, Bitcoin was once again playing with the bulls, retesting the $38,500 limit, only to witness a selloff and eventually settle around the $33,500 region. While for most crypto veterans that might have been another day at the office, others branded the upsurge as “Elon’s Candle,” which relates to Elon Musk, the CEO of Tesla, who included “Bitcoin” in his Twitter bio as well as sent out the following cryptic message “in retrospect, it was inevitable” to his 40 million-odd followers online. Regardless of the cause, has the recent price volatility sca...
Post a Comment
Read more