Bitcoin's upside outlook is supported by at least three on-chain and technical indicators - but has it bottomed?

Bitcoin (BTC) may be bottoming out after a 25% rally, according to several market signals.

If you don’t understand or are uncertain about altcoins in the currency circle, if you also want to cross the bulls and bears, watch others sink to the bottom in the bear market, double your income, and get rid of the shackles of bulls and bears, then follow me.

The price of BTC has risen about 25% after falling to around $17,500 on June 18. From the November 2021 high of $69,000, the price of BTC has seen an upside retracement after a 75% correction.

However, the recovery appears to be tepid and bears ongoing risks due to prevailing macroeconomic headwinds (rate hikes, inflation, etc.) and the collapse of many well-known crypto firms (e.g. Three Arrows, Terra, etc.).

But some widely tracked indicators paint a different scenario, suggesting that bitcoin has little downside prospects from current price levels.

The first sign of a macro bottom for Bitcoin came from its weekly Relative Strength Index (RSI).

Notably, BTC’s weekly RSI became “oversold” after falling below 30 for the week of June 13. This is the first time the RSI has slipped into oversold territory since December 2018. Interestingly, Bitcoin ended the same month with a bear market rally that rose more than 340% over the next six months to $14,000.

In another example, Bitcoin’s weekly RSI fell to 30 (if not below) during the week beginning March 9, 2020. This also coincided with the price of BTC bottoming below $4,000 before rallying to $69,000 in November 2021, as shown below.

Bitcoin prices have seen a similar rally since June 18, opening the door for a possible repeat of the history of parabolic rallies following an “oversold” RSI signal.

Another sign of a potential Bitcoin macro bottom comes from its Unrealized Net Profit and Loss (NUPL) metric.

NUPL is the difference between market capitalization and realized market capitalization divided by market capitalization. It is expressed as a ratio, where a reading above zero means the investor has made a profit. The higher the number, the more profit the investor can make.

On July 21, Bitcoin NUPL climbed above zero as the price fluctuated around $22,000. Historically, this reversal has been accompanied by major BTC price increases. The chart below illustrates the same situation.

The third sign that Bitcoin is forming a macro bottom comes from another on-chain indicator called the Puell Multiple.

Puell Multiple examines the profitability of the mining industry and its impact on market prices. The indicator does this by measuring the ratio of the daily coin issuance (in USD) to the 365-day moving average of the daily coin issuance (in USD).

A strong Puell Multiple reading shows higher mining profitability compared to the yearly average, suggesting miners will liquidate their Bitcoin funds to maximize revenue. Therefore, higher Puell multiples are known for being consistent with macro tops.

Conversely, a lower Puell multiple reading means that miners are currently less profitable than the annual average.

As a result, rigs that generate break-even or sub-zero income from Bitcoin mining risk shutting down, ceding market share to more competitive miners. Historically, expelling weaker miners from the Bitcoin network has reduced selling pressure.

Interestingly, the Puelle Multiple reading as of July 25 is in the green box, similar to the levels observed during the March 2020 crash and the price bottoms in 2018 and 2015.

If you don't understand or have certain altcoins in the currency circle, if you also want to cross the bulls and bears, watch others sink to the bottom in the bear market, double your income, and get rid of the shackles of bulls and bears, then follow me!

Bitcoin's upside outlook is supported by at least three on-chain and technical indicators - but has it bottomed?

Bitcoin (BTC) may be bottoming out after a 25% rally, according to several market signals.

If you don’t understand or are uncertain about altcoins in the currency circle, if you also want to cross the bulls and bears, watch others sink to the bottom in the bear market, double your income, and get rid of the shackles of bulls and bears, then follow me.

The price of BTC has risen about 25% after falling to around $17,500 on June 18. From the November 2021 high of $69,000, the price of BTC has seen an upside retracement after a 75% correction.

However, the recovery appears to be tepid and bears ongoing risks due to prevailing macroeconomic headwinds (rate hikes, inflation, etc.) and the collapse of many well-known crypto firms (e.g. Three Arrows, Terra, etc.).

But some widely tracked indicators paint a different scenario, suggesting that bitcoin has little downside prospects from current price levels.

The first sign of a macro bottom for Bitcoin came from its weekly Relative Strength Index (RSI).

Notably, BTC’s weekly RSI became “oversold” after falling below 30 for the week of June 13. This is the first time the RSI has slipped into oversold territory since December 2018. Interestingly, Bitcoin ended the same month with a bear market rally that rose more than 340% over the next six months to $14,000.

In another example, Bitcoin’s weekly RSI fell to 30 (if not below) during the week beginning March 9, 2020. This also coincided with the price of BTC bottoming below $4,000 before rallying to $69,000 in November 2021, as shown below.

Bitcoin prices have seen a similar rally since June 18, opening the door for a possible repeat of the history of parabolic rallies following an “oversold” RSI signal.

Another sign of a potential Bitcoin macro bottom comes from its Unrealized Net Profit and Loss (NUPL) metric.

NUPL is the difference between market capitalization and realized market capitalization divided by market capitalization. It is expressed as a ratio, where a reading above zero means the investor has made a profit. The higher the number, the more profit the investor can make.

On July 21, Bitcoin NUPL climbed above zero as the price fluctuated around $22,000. Historically, this reversal has been accompanied by major BTC price increases. The chart below illustrates the same situation.

The third sign that Bitcoin is forming a macro bottom comes from another on-chain indicator called the Puell Multiple.

Puell Multiple examines the profitability of the mining industry and its impact on market prices. The indicator does this by measuring the ratio of the daily coin issuance (in USD) to the 365-day moving average of the daily coin issuance (in USD).

A strong Puell Multiple reading shows higher mining profitability compared to the yearly average, suggesting miners will liquidate their Bitcoin funds to maximize revenue. Therefore, higher Puell multiples are known for being consistent with macro tops.

Conversely, a lower Puell multiple reading means that miners are currently less profitable than the annual average.

As a result, rigs that generate break-even or sub-zero income from Bitcoin mining risk shutting down, ceding market share to more competitive miners. Historically, expelling weaker miners from the Bitcoin network has reduced selling pressure.

Interestingly, the Puelle Multiple reading as of July 25 is in the green box, similar to the levels observed during the March 2020 crash and the price bottoms in 2018 and 2015.

If you don't understand or have certain altcoins in the currency circle, if you also want to cross the bulls and bears, watch others sink to the bottom in the bear market, double your income, and get rid of the shackles of bulls and bears, then follow me!