Bitcoin whales are taking advantage of the current correction to acquire BTC at discounted rates as the Puell Multiple shows markets are adjusting to a new phase of scarcity after the April 20 halving.
Bitcoin Price Primed For Recovery
BTC has shown weakness since May 21, taking a downward chop, followed by a consolidation before a mid-week cascade. However, the upside potential remains viable amid a sustained bullish momentum.
The BTC/USDT trading pair shows a prevailing bullish outlook on the one-day timeframe as it consolidates along an ascending trendline.
Tailwinds sprout from growing institutional adoption. It follows the landmark 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 a year. Researchers at CryptoQuant say investors may interpret this “as a sign that the market is adjusting to a new phase of scarcity, potentially preparing for a rally.”
Bitcoin Market Value Based On Its Mining Activity
The Puell Multiple indicator is a tool that evaluates Bitcoin value based on its mining activity. It is the ratio between daily revenue and the 365-day moving average.
When this indicator reaches the discount range after a year, it typically indicates that the value of Bitcoin may be undervalued compared to historical averages.
This could present a potential buying opportunity for investors who believe that the price of Bitcoin will likely increase in the future.
With reduced mining rewards following the fourth BTC Halving on April 20, Bitcoin miners continue to suffer, until that time when Bitcoin price rises significantly to compensate for this reduction. Dwindling daily revenues for miners after the Bitcoin halving leads to a decrease in the Puell Multiple.
The current range in which the Puell Multiple is quoted confirms Bitcoin price is at a discount. It means the network is potentially cheap.
With reduced supply amid reduced miner revenues, Bitcoin price could recover as demand grows. The drop in the Puell Multiple suggests the market is adjusting to a new phase of scarcity. This is ahead of a possible rally as the long-term moving average takes time to adjust to this new reality.
Bitcoin Whales Make A Comeback
Elsewhere, the buying appetite among BTC whales is coming back. Since March there has been a drop in buying interest. The resumption shows the current price range is a suitable accumulation zone despite the widespread fear.
