Bitcoin, the cryptocurrency market leader and largest digital asset, is currently trading at $58,877 after a rather sloppy price movement over the past day. According to data from CoinMarketCapthe major cryptocurrency saw more declines than gains in August, resulting in a decline of 8.46% for the month. In early September, a CryptoQuant analyst with the username Grizzly provided valuable insight into Bitcoin’s current price status and potential price changes in the coming weeks.
Puell Multiple Index Indicator Puts Bitcoin in Decision Zone
IN post X on Saturday, Grizzly said there’s a lot of uncertainty surrounding Bitcoin’s movement based on data from the token’s Puell Multiple Index. For context, the Puell Multiple Index is a Bitcoin trading indicator used to measure miner profitability and the broader market price trend. It’s estimated by dividing Bitcoin’s issuance value by its 365-day moving average.
According to Grizzly, when the indicator is between 0.6 and 0.8, which is currently the case, it means that the BTC market is a “decision zone” with equal potential to initiate an uptrend as well as a downtrend.
Generally speaking, a drop below 0.6 indicates that Bitcoin miners are making less than the historical average, mainly due to the decline in BTC price. Grizzly believes that such a scenario presents a good opportunity for Dollar-Cost Averaging (DCA), where investors buy Bitcoin incrementally to lower the average cost of purchase over time.
Alternatively, a breakout above the 0.8 level indicates increasing miner profitability, in tandem with the rise in Bitcoin prices. Based on historical price data, Grizzly states that such a development usually signals the beginning of a bull market.
Bitcoin whale count hits 17-month high
In other news, amid Bitcoin’s turbulent performance over the past month that has left many retail traders holding on to losses, the number of market whales has maintained a steady escalate. According to data from chain analytics firm SantimentIn August, the number of wallets holding more than 100 BTC increased by a net 283, reaching a 17-month high of 16,120.
The rise in the number of market whales and the accumulation of assets indicate significant confidence in the token’s long-term viability. Thus, this rising BTC level can be broadly interpreted as a bullish signal for the coming months. However, price increases can be expected in Q4, as historical data indicates that September is likely to be another bearish phase.
As mentioned earlier, Bitcoin is still trading at around $58,877, down 7.56% in the past week. Meanwhile, the asset’s trading volume has dropped significantly by 61.93% and is valued at $12.70 billion.
