Bitcoin On-Chain Indicator Suggests $58.5K as Potential Buy Level

A contributor from CryptoQuant points out that a slight dip in Bitcoin’s Puell Multiple index may indicate a favorable opportunity for investors.

Market Insights

A well-known Bitcoin indicator, utilized by traders to analyze miner selling patterns, is nearing a level that may suggest a promising buying opportunity, as highlighted by a crypto analyst.

The contributor shared insights on August 31, stating, “The Puell Multiple index is fluctuating within critical thresholds. If historical trends continue, a bearish scenario where the index falls below 0.6 could signal a favorable buying opportunity for investors.”

The range of 0.6 to 0.8 on the Puell Multiple Index is identified as the “Decision Zone.”

Historical data, extending back to 2014, indicates that when the index dips below the 0.6 threshold, it often represents an optimal moment for implementing Dollar-Cost Averaging (DCA) strategies in Bitcoin.

Traders Monitor Miner Activity

Traders frequently use the Puell Multiple to assess miner revenue health. A higher Puell Multiple signifies lower selling pressure, conversely, a lower index indicates increased selling pressure.

As of the latest update, the Puell Multiple sits at a score of 0.69, based on data from Bitbo. For comparison, when Bitcoin reached its all-time high of $73,679 on March 13, the Puell Multiple was recorded at 1.88.

Currently, Bitcoin is trading at $58,416, reflecting a decline of 8.98% over the last week, according to CoinMarketCap data.

A pseudonymous crypto analyst has suggested that the Puell Multiple indicates one of the most opportune times to buy Bitcoin in over two years.

“I assert that this is your second-best chance since 2022 to re-accumulate before the next market wave begins,” stated the analyst.

However, the duration for which Bitcoin remains in this uncertain trading range is a topic of ongoing discussion among traders.

Another analyst suggested that Bitcoin could potentially “break out” of its reaccumulation phase as soon as “late September,” although there’s a prevailing belief that it might “consolidate” throughout September before an “October breakout.”