The price of Bitcoin (BTC) came under massive selling pressure, falling as low as $53,500 on Monday due to massive selling by the German government as well as the repayment of creditors of Mt. Gox. After yesterday's drop, Bitcoin price has recovered to $57,448 as of this writing with several on-chain metrics pointing to strength for Bitcoin going forward.
On-chain data provider CryptoQuant uses the Bitcoin Puell Multiple to identify the bottom of a bear market as well as signal the end of a correction period in a bull market. Based on historical data, the Puell Multiple metric has fallen significantly during bull cycles, such as in 2016 and 2020 followed by strong increases in Bitcoin prices. In 2024, the same pattern has emerged indicating that the end of the correction in this bull market may be near. As a result, CryptoQuant expects the start of a bull run in this third quarter.
This past June saw a massive drop in accumulation by Bitcoin miners as their profits fell by 7.8%, at a level not seen since the halving event in April. BTC miners' daily earnings have fallen to $26 million, from a staggering $78 million before the halving event.
On-chain data provider Santiment reported a drop in Bitcoin wallets now at 54.09 million. Since June 15, the net decrease in this wallet is 566,000.
Santiment reports that this reduction is a positive sign for patient investors. This decrease in the wallet is due to selling by holders who cannot sustain losses known as "weak hands". According to Santiment, this often reflects market policy caused by fear, uncertainty, and doubt (FUD). A similar pattern was observed earlier in January, indicating a potential buying opportunity.
Santiment further reported that the 30-day and 365-day Bitcoin MVRV indicators are in negative territory. This situation indicates a buying opportunity, as it indicates that the current purchase is being made when other traders are experiencing losses.
Santiment points out that the last time both MVRV ratios were in the negative, investors who bought Bitcoin at that time would have seen a return of 132%.
