Historically Accurate Bitcoin Metric Breaks Out of Buy Zone in ‘Unprecedented’ 2022 Bear Market

Bitcoin (BTC) is enjoying what some call a “bear market rally” and gained 20% in July, but the price action is still baffling analysts.

Heading into July’s monthly close, Puell’s multiple exited its lower zone, raising hopes that the worst of the losses may be in the past.

Puell Multiple attempts to cement breakout

The Puell Multiple is one of the best-known on-chain Bitcoin metrics. It measures the value of bitcoins mined on a given day compared to the value of those mined in the past 365 days.

The resulting multiple is used to determine if a day’s mined coins are particularly high or low compared to the year’s average. From this, the profitability of miners can be inferred, as well as more general conclusions about the degree of overbought or oversold the market.

After hitting levels that traditionally accompany macro price lows, the Puell Multiple is now aiming higher – which is traditionally seen at the start of macro price uptrends.

“Based on historical data, the breakout of this zone was accompanied by bullish momentum in the price chart,” Grizzly, a contributor to on-chain analytics platform CryptoQuant, wrote in one of the updates from the company’s “Quicktake” market on July 25.

Puell Multiple chart (screenshot). Source: LookIntoBitcoin

The Multiple is not the only signal flashing green under current conditions. As Cointelegraph reported, accumulation trends among hodlers also suggest that the macro bottom is already in place.

“Unprecedented macroeconomic conditions”

After its surprise relief bounce in the second half of this month, Bitcoin is now close to six-week highs and away from a new macro low.

Related: Bitcoin Futures Data Shows ‘Improved’ Mood Despite GBTC Premium of -31%

As sentiment moves out of the “fear” zone, market watchers are pointing to unique phenomena that continue to make the 2022 bear market extremely difficult to predict with certainty.

In another of its recent “Quicktake” research papers, CryptoQuant noted that even price trends are not acting as usual this time around.

In particular, BTC/USD has crossed its realized price level several times over the past few weeks, which has not happened in previous bear markets.

The realized price is the average at which BTC supply last moved and is currently just below $22,000.

“The realized price has signaled market lows in previous cycles,” CryptoQuant explained.

“Most importantly, bitcoin price has not crossed the realized price threshold in the last two time periods (134 days in 2018 and 7 days in 2020). Yet since June 13, it has crossed this threshold three times. level, which shows the uniqueness of this cycle due to unprecedented macroeconomic conditions.”

Bitcoin realized price chart. Source: Glassnode

These conditions, as Cointelegraph has reported, have come in the form of forty-year highs in US inflation, rampant rate hikes by the Federal Reserve and, more recently, signals that the economy America has entered a recession.

In addition to realized price, Bitcoin has had an unusual relationship with its 200-week moving average (MA) in this bear market.

While normally holding it as support with brief declines below, BTC/USD managed to tip the 200-week MA into resistance for the first time in 2022. It currently sits at around $22,800, according to data from Cointelegraph Markets Pro and TradingView.

BTC/USD 1 week candle chart (Bitstamp) with 200 week MA. Source: Trading View

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