An optimistic scenario did not pan out for Bitcoin over the weekend. On Sunday, a weekly high of $21,888 was registered; however, the momentum flipped in a bearish direction by the end of the day. The current week commenced in the same order, and now, Bitcoin is clocking its 4-straight bearish candles on the daily frame.
A moonshot situation of $28,700 is temporarily gone, and a retest down to $19,173 looks possible. While the market is expected to remain bearish over the next few days, a key signal suggested that Bitcoin bear market days might be numbered in the future.
How long before a Puell Multiple Rally?
The Puell Multiple has been an important indicator to illustrate Bitcoin bottoms in the past. The rate of change for the indicator is currently optimized further, and now, there are three evident regions of a market cycle. The red zones indicate the euphoric bull market tops, a mid-cycle rally is characterized by center consolidation, and the green zones have marked the bottom for most bearish rallies. In 2022, the Puell Multiple has confirmed a bearish market, and gradually, the price might start to build from this current position.
Analyzing the scenario, Bitcoin would be entering a market reversal period.
The movement of Bitcoin whales can assume a critical factor that the bottom formation is underway. On November 12th, 2021, 168.1k Bitcoins were accumulated. Seven months later, on June 18th, another 148.1k Bitcoin was registered as inflows for large wallets.
The inference that can be drawn from here is that Bitcoin might continue to bounce back from its previous week’s low of $19,173. This will mark the beginning of recovery, and Bitcoin could gradually head towards sustained price gains.
Is it that simple for Bitcoin?
Sadly not. As witnessed in the 1st chart, the recovery period after a bearish cycle takes place over a prolonged period. The rising price slowly pushes the Puell indicator to the mid-cycle region, and then the euphoric period moves the valuation at an exponential rate. It is important to note that these are still assumptions drawn from the readings and not confirmed trend periods yet.