Is the current price region the bottom for the bitcoin (BTC) rate? That’s a question many traders and analysts are pondering now that BTC has been trading sideways for some time now. At least the Puell Multiple, an indicator, is showing a positive signal for the first time in a long time, Look Into Bitcoin’s Philip Swift noted yesterday.
The Puell Multiple looks at how miners behave, among other things. The indicator has successfully signaled a top or bottom in the past and is currently showing that the bottom may have been reached. “A great bounce,” Swift writes in a tweet:
“A great bounce out of the green zone this week for the Puell Multiple.
Largely due to the difficulty adjustment and hashrate increase. Will be a good sign if we see this and the hashrate continues to rise rapidly as bitcoin miners come back on board.”
1/ Hell of a bounce out of the green zone this week for the Puell Multiple.
Largely down to the difficulty adjustment and increase in hashrate. Will be a good sign if we see this and hashrate continue to climb quickly as #bitcoin miners come back onboard. pic.twitter.com/R7CBeMxCr6
— Philip Swift (@PositiveCrypto) July 9, 2021
Swift refers in his tweet to the largest difficulty adjustment for Bitcoin ever. Since miners in China are no longer allowed to mine BTC, the computing power has dropped significantly. The difficulty adjustment down now makes it easier for miners to mine. You can read more about this in this column.
Now that it is easier to mine bitcoins again, more miners are encouraged to participate. Moreover, the miners who left China are now slowly coming back online. All this contributes to the fact that the hashrate is now slowly climbing again. A good sign, according to Swift.
Biggest ever difference between bitcoin price and Stock-to-Flow model
Furthermore, we see a signal that can be both positive and negative. It stock-to-flow (S2F) The model of the Dutch analyst PlanB has never differed so much from the bitcoin price itself. While the S2F model predicts a price of $82,700 for today, bitcoin is trading a lot lower. Namely, 59% lower at $33,800.
Lex Moskovski of Moskovski Capital writes on Twitter: “This is a great buying opportunity,” at least, “if you believe in this model.” It must be said that historically the S2F model was often right. Is this when the S2F model breaks for the first time? PlanB itself therefore remains extremely positive for 2021.
Negative Stock-To-Flow deflection is the highest it’s ever been in the whole #Bitcoin history.
This is a great buying opportunity, if you’re a believer in this model. pic.twitter.com/N3CFLLJdH9
– Lex Moskovski (@mskvsk) July 10, 2021
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