Analysts evaluated bitcoin indicators and determined the bottom of BTC. Experts believe that bitcoin price can still compensate for its losses and, based on the indicators, in the next few months again reach the $ 40,000 mark.
However, now bitcoin price has fallen below $30,000 again and has descended to the level of $29,300. In this regard, crypto analyst Benjamin Cowan has identified three key indicators that provide insight into when bitcoin will bottom out.
One of the indicators used to identify bitcoin pullbacks and predict the bottom of the cycle is bitcoin’s one-year ROI, calculated as a multiplier of profits from holding BTC for a year.
A one-year drop in ROI to 0.4 or 0.3 means that the asset is near the bottom of the market cycle. Bitcoin’s current ROI for one year is 0.647, which means that the price of BTC has not yet bottomed out.
Another indicator that determines the bottom of bitcoin’s market cycle is the percentage of supply in profits and losses. These are marked on the charts with separate lines. Every time the supply percentage in profit crosses the supply percentage in loss, it indicates that bitcoin has reached the bottom of the market cycle.
Analysts have seen the pattern appear in the last two bitcoin cycles. Currently, this event has not happened yet, but the two lines are moving towards each other. Thus, the bottom of BTC may be reached in a few weeks or months.
The Puella Multiplier, calculated by dividing the daily bitcoin issue value by the 365-day moving average, is a metric used to estimate the level of pressure from miners to sell bitcoins.
Historically, miners sell bitcoin to cover their operating costs, and their income consists of the rewards they are awarded per block. Their value changes almost every day due to the volatility of the BTC price.
Benjamin Cowan noted that the bottom of the market cycle is usually defined by a drop in the Puell Multiplier to 0.4 or lower. The BTC Puell Multiple value is currently above 0.59, indicating that we are close to the bottom, so the price of the asset could fall below $25,000.
Three indicators are signaling that bitcoin’s bottom has not yet been reached. Consequently, the bitcoin price may fall even more, although this may not happen.