At the time of writing, Bitcoin price is holding steady, finding support at the $56,300 to $57,000 level, looking at the performance on the daily chart. Technically, sellers have the upper hand from an effort vs. outcome perspective.
For the short-term trend to change, prices must recover the losses incurred on September 1. At the same time, the rise must be accompanied by an expansion in trading volume.
At the moment, Bitcoin price may be stable. However, the accompanying participation, given the September 2 bar, is light.
What is needed is a sharp increase in trading volume to calm fears and reassure bullish traders that buyers are back in the picture.
Bitcoin Expands, Boyle Multiplier Ratio in Neutral Zone
As Bitcoin tries to find its footing, one analyst says: quote Analysts believe it is too early to celebrate the on-chain data. Today’s expansion did not quickly raise the Puell multiplier drawn by CryptoQuant.
The reading is 0.65 and is within the range of 0.6 and 0.8. In this area, Bitcoin remains neutral. Therefore, the Boyle multiplier reading needs to quickly expand above 0.8 or drop to the 0.6 area for traders to explore opportunities.
The Puell multiplier compares the amount of BTC issued daily to its annual average. As issuance fluctuates over the months, this reading fluctuates. In the past few months, and following the halving event on April 20, the Puell multiplier has been in a tight range between 0.6 and 0.8.
Pointing to the historical buildup over the past decade, the analyst said that when the Boyle multiple drops below 0.6, it tends to present low-risk, high-reward buying opportunities, which could particularly benefit those using dollar-cost averaging (DCA) strategies.
Conversely, if the ratio rises above 0.8, it means that market sentiment is bullish, and prices may rise further. The analyst added that in most cases, whenever the ratio rises above 0.8, prices tend to rise, recording all-time highs.
Is Bitcoin Building Upward Momentum?
Consider the Boyle’s complication rate. direction In contrast to the price action, it is easy to spot the near-perfect synchronization between them.
For example, when prices fell to $49,000 on August 5, the Boyle Multiple, as a lagging indicator, collapsed to 0.549. Prices then rose, pushing the indicator up.
The recovery from the 0.60 area is noteworthy. If this is evidence, it could also mean that the currency, despite its decline, is currently gaining momentum.
Featured image by Pexels, chart by TradingView
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