Bitcoin (BTC) is enjoying what some call a “bear rally” and is up 20% in July, but the price action is still confusing analysts.
With the July monthly close, the Puell Multiple has left its bottom zone, raising hopes that the worst losses may be in the past.
Multiple attempts to pull cement breakout
The pull multiple is one of the best-known on-chain bitcoin metrics. It measures the value of bitcoins mined on a given day compared to the value of bitcoins mined in the past 365 days.
The resulting multiplier is used to determine whether a day’s minted coins are particularly high or low relative to the year’s average. From this, miner profitability can be estimated, as well as more general conclusions can be drawn about how much the market is overbought or oversold.
Having traditionally hit levels that come with macro price bottoms, the pull multiple is now targeting higher – something that is traditionally seen at the start of a macro price uptrend.
Grizzly, a contributor to on-chain analytics platform CryptoQuant, wrote in one of the firm’s “QuickTake” market updates on July 25, “Based on historical data, the breakout from this area was accompanied by a rapid gain in price charts. “
Multiple is not the only signal that glows green under current circumstances. As Cointelegraph reported, accumulation trends among hodlers are also indicating that a macro bottom is already in place.
“Unprecedented macroeconomic situation”
After a surprising relief surge in the second half of this month, bitcoin is now near its six-week high and is far from a new macro low.
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As sentiment moves out of “fear” territory, market watchers are pointing to unique events that are making the 2022 bear market extremely difficult to predict with any certainty.
In one of its recent “QuickTech” research pieces, Cryptoquant noted that even the price trend is not acting normally this time around.
Notably, BTC/USD has exceeded its real price levels several times in recent weeks, which did not happen in previous bear markets.
The actual price is the average at which the BTC supply moved last, and is currently below $22,000.
“Realized prices have indicated market lows in previous cycles,” explained Cryptoquant.
“More importantly, the price of bitcoin has not been able to cross the real price range during the last two periods (134 days in 2018 and 7 days in 2020). Nevertheless, since June 13, it has been this three times. The level has been exceeded, indicating the uniqueness of this cycle due to unprecedented macroeconomic conditions.”
Those conditions, as Cointelegraph reported, indicate a forty-year high in inflation in the United States, massive rate hikes by the Federal Reserve, and the recent sign that the US economy has entered recession.
Meanwhile, apart from the actual price, bitcoin has made an unusual correlation to its 200-week moving average (MA) this bear market.
While normally maintaining it as support with a brief decline below, BTC/USD managed to turn the 200-week MA into resistance for the first time in 2022. It currently sits around $22,800, data from Cointelegraph Markets Pro and TradingView show.
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