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.

✓ Share:

Lockridge transitioned from a career in Molecular and Cell Biology to pursue his interest in the chaos of the crypto and financial markets. He is a cryptocurrency journalist and market analyst with over 3,000 articles to his name. Conducting on-chain analysis, breaking down market-triggering events, and publishing Op-Ed pieces, he finds gratification in diving deep into the crypto space, earning himself significant knowledge and experience.

Aside from ATZCrypto, Blockster and InsideBitcoins, Lockridge’s works can also be found on FXStreet.com. Outside work, you can find Lockridge watching movies or horse riding.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.