Bitcoin Price Signs Emerge on Daily Chart

CryptoQuant data indicates that Bitcoin’s daily Puell Multiple is on the verge of surpassing its 365-day moving average, hinting at a potential uptrend. The Puell Multiple assesses the ratio of daily mined BTC to the 365-day average price, serving as a gauge for miner profitability.

A high Puell Multiple (above 4) suggests miners are enjoying profits beyond their usual expenses, possibly prompting them to sell some holdings and applying downward pressure on the price. Conversely, a low Puell Multiple (below 0.5) indicates miners are grappling with slim profits and are more likely to retain their coins to avoid losses.

In a recent report, CryptoQuant analyst DataScope shared a chart illustrating that historical instances of the daily Puell Multiple crossing above the 365-day moving average often preceded periods of BTC price appreciation. According to the analyst, this relationship signifies market trends, with such crossovers typically indicating an upward price trend.

Despite expectations of a rally post-ETF approval, Bitcoin reached a peak of $48,625 on January 11 and has since trended downward. Currently trading at $40,918, the leading cryptocurrency has experienced a 16% decline over the last ten days, as per CoinMarketCap data.

Despite the imminent crossover of BTC’s daily Puell Multiple above the 365-day moving average, the prospect of a rally is clouded by the recent low trade volume, signaling challenges in the short term.

A seven-day moving average analysis of the coin’s daily trading volume reveals a significant 35% decline since January 14. Santiment’s data indicates that this reduced trading activity may be attributed to the persistently negative weighted sentiment surrounding the coin post-ETF launch. At the current moment, BTC’s Weighted Sentiment stands at -0.494.

Examining the daily price chart, it becomes evident that Bitcoin has been in a bear cycle since January 12, marked by the MACD line crossing below the trend line, yielding negative values. The MACD line’s intersection with the trend line and subsequent descent below the zero line indicates that the short-term moving average has surpassed the long-term moving average, emphasizing the dominance of downward momentum over any potential uptrend.

Traders typically interpret this scenario as a sell signal, adding to the downward pressure on the asset’s price. Consequently, any anticipated price uptrend may face delays until sentiment improves, and bullish forces make a concerted effort to regain control of the market.