Bitcoin is without a doubt in the accumulation phase where investors are preparing for another upward price movement. On-chain indicators such as the ‘Puell Multiple’ and the ‘Market Value to Realized Value’ are slowly turning green. Bitcoin has also passed the Tesla dump and the price is currently trading comfortably above USD 20,000.
Bitcoin in accumulation phase
The main signal that Bitcoin is currently undervalued comes from the Puell Multiple. That is an on-chain indicator that shows the relationship between the Bitcoin sold by miners and the “fair” value of Bitcoin. Around the middle of July, this indicator fell below 0.5 putting us in the “green zone”.
In the past, that has often been the moment when Bitcoin started a new rally. This score preceded the start of the 2020 bull run, among other things. Blockware Intelligence also indicates that entering the “green zone” is a good time to buy Bitcoin in small chunks.
At the same time, CryptoQuant’s Julio Moreno said that this score has reached an area often associated with bottoms in the past. While the miners had to sell a lot in the past period to keep their heads above water, the whales and shrimps have bought in. Shrimps, wallets with less than 1 Bitcoin, currently hold their most Bitcoin ever.
Tesla dump survived
In addition to the good news on the on-chain front, Bitcoin has also survived the Tesla dump in the past quarter. At the end of the quarter, Elon Musk’s Tesla announced that it sold 75 percent of their Bitcoin to get liquidity into the company. At Tesla they fear a difficult period and that means that they can use all the dollars. In particular, the temporary closure of the factory in Shanghai as a result of Corona hurts the company.
However, the Tesla dump appears to be part of the Bitcoin bottom. A phase of the market in which many parties were forced to dump or did so as a precaution. We have since climbed back up from the bottom and the bulls are now battling the bears to recapture the $24,000.