Bitcoin
Bitcoin Price Volatility Signals Possible Q3 Bull Run: Key Metrics Explained
Bitcoins Recent price volatility, with a drop to $53,500 amid significant liquidations by the German government and Mt. Gox creditors, has caught investors’ attention. Despite this, the price has recovered to $57,500, indicating resilience in on-chain metrics. Major U.S. institutions such as BlackRock and Fidelity are buying Bitcoin ETFs despite the price drop.
However, an analysis reveals that the market will turn bullish in Q3. Let’s examine the key metrics in detail.
Bitcoin Puell Multiple Predicts Bullish Momentum
In the current crisis, this bullish analysis is easy for investors looking for a Q3 entry. CryptoQuant’s analysis Using the Bitcoin Puell Multiple suggests a potential end to the current correction phase within the ongoing bull market. However, historically, this data reveals significant declines in the Puell Multiple, usually an indicator of strong price rallies, as seen during previous bull cycles in 2016 and 2020.
June 2024 saw a substantial capitulation from miners, with profitability plummeting 7.8% since the April halving event. Miners’ daily revenue dropped dramatically from $78 million to $26 million, underscoring market stress among miners.
Not over yet…
Many are quick to declare this bull market over, selling their long-term holdings in capitulation. However, a deep dive into on-chain data, compared to previous cycles, indicates that we are still in the early stages of this new bull cycle. But technically, cryptocurrency cycles start after the halving, with an average duration of over 500 days. Therefore, we are currently 79 days after the 2024 BTC halving. If we zoom out on the charts, there is still a long way to go in this bull cycle.
A buying opportunity?
Adding to the bullish sentiment, Santiment data shows a decline of 566,000 non-empty Bitcoin wallets since mid-June, reflecting liquidations by short-term holders amid market uncertainty. Such a drawdown, often seen at market bottoms, historically presents buying opportunities for patient investors.
Similarly, the 30-day and 365-day Bitcoin MVRV indicators are also currently in the negative zone, indicating the best time to buy Bitcoin. This perfect combination has in the past led to substantial returns for investors who entered the market during these periods.
Wait for the third trimester!
With multiple indicators aligning toward bullish sentiment, including the anticipated start of a bull run in Q3 2024 based on the Puell Multiple, Bitcoin appears poised for a potential price recovery. Investor caution remains advised amid ongoing market volatility and regulatory developments. So far, the Puell Multiple indicator has perfectly predicted BTC’s bottom, bear trap, and peak over the past three cycles.
Based on the Puell Multiple indicators, we are currently in a bear trap and can expect an upward movement from this level.
Read too: Are the top 5 cryptocurrencies poised for a bullish rally?