Bitcoin Whales Make a Comeback as Markets Adjust to New Phase of Scarcity
As Puell Multiple markets try to adapt to a new phase of scarcity following the April 20 halving, Bitcoin whales are taking advantage of the current correction to buy BTC at discounted prices.
Bitcoin Price Poised to Recover
BTC has shown weakness since May 21, following a downward trend followed by a consolidation before the mid-week cascade. However, upside potential remains amid sustained bullish momentum.
The BTC/USDT trading pair is showing a prevailing bullish outlook on the one-day time frame while consolidating along an ascending trend line.
BTC/USDT 1-day chart
Tailwinds are burgeoning with increasing corporate adoption. This follows groundbreaking 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 one year. Researchers at CryptoQuant say investors may interpret this as “a sign that the market is adjusting to a new phase of scarcity and potentially preparing for a rally.”
Bitcoin Market Cap by Mining Activity
The Puell Multiple indicator is a tool that evaluates the value of Bitcoin based on mining activity. It is the ratio between daily income and the 365-day moving average.
When this indicator reaches the discount range after a year, this generally indicates that Bitcoin’s value may be undervalued compared to historical averages.
This could present a potential buying opportunity for investors who believe the Bitcoin price will increase in the future.
Due to decreasing mining rewards following the fourth BTC Halving on April 20, Bitcoin miners continue to suffer until the Bitcoin price increases significantly enough to compensate for this decline. The decrease in miners’ daily income after the Bitcoin halving leads to a decrease in Puell Multiple.
Check Multiple
The current range in which Puell Multiple is quoted confirms that the Bitcoin price is discounted. This means the network is potentially cheap.
As miner revenues decrease and supply decreases, Bitcoin price may recover as demand increases. The decline in Puell Multiple indicates that the market is adapting to a new phase of scarcity. This is ahead of a possible uptrend, as the long-term moving average takes time to adjust to this new reality.
Bitcoin Whales Are Making a Comeback
Elsewhere, buying appetite among BTC whales is returning. There has been a decrease in purchasing interest since March. The resumption shows that the current price range is a favorable accumulation zone, despite widespread fear.
BTC Whales are returning
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Lockridge transitioned from a career in Molecular and Cell Biology to pursue his interest in the chaos of crypto and financial markets. He is a cryptocurrency journalist and market analyst with over 3,000 articles to his name. He enjoys diving deep into the crypto space and gaining significant knowledge and experience for himself by conducting on-chain analysis, breaking down market triggers, and publishing Op-Ed articles. In addition to ATZCrypto, Blockster, and InsideBitcoins, Lockridge’s work can also be found on FXStreet.com. Outside of work, you can find Lockridge watching movies or horseback riding.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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