At least three on-chain and technical gauges indicate that Bitcoin upside possibilities are strong, but has the bottom been reached?

Based on a number of market signs, Bitcoin (BTC) may be bottoming out after gaining 25%.

BTC’s price has increased by almost 25%, from falling to about $17,500 on June 18. After a 75 percent decline measured from its peak of $69,000 in November 2021, the price moved upward again.

However, given the current macroeconomic headwinds (rate rise, inflation, etc.) and the failure of several well-known crypto businesses like Three Arrows Capital, Terra, and others, the rebound appears small and has adverse continuation risks.

However, other widely followed indicators present a different picture, indicating that there is little chance of Bitcoin’s price falling below its current levels.

That big “oversold” bounce

The weekly relative strength index of Bitcoin is the first indicator of the macro bottom (RSI).

Notably, BTC’s weekly RSI crossed the “oversold” territory threshold on June 13 after falling below 30. The RSI hasn’t entered the oversold zone since December 2018 till now. It’s interesting to note that Bitcoin had concluded its bear market rise in the same month. Almost the next six months, it rose over 340 percent to reach $14,000.

Another instance was the week commencing March 9, 2020, when Bitcoin’s weekly RSI fell toward 30 (if not below). That also occurred simultaneously with BTC’s price hitting a low of $4,000 before rising to $69,000 by November 2021, as illustrated below.

Since June 18, the price of bitcoin has recovered similarly, creating the possibility of a recurrence of the previous parabolic rises following an “oversold” RSI signal.

Bitcoin NUPL jumps above zero

The net unrealized profit and loss (NUPL) indicator, another signal of a probable Bitcoin macro bottom, is another useful tool.

The NUPL is the result of dividing the market cap by the realized cap. A ratio is used to express it, and a value greater than zero indicates that investors are making money. The more this figure is greater, the more investors make money.

The Bitcoin NUPL increased over zero on July 21 as the price fluctuated around $22,000. Historically, significant BTC price rises have occurred after such a switch. The same is seen in the chart below.

• Three Bitcoin Mining Difficulty Adjustment In a Row
• Tesla’s Most recent SEC Filing Reveals Holdings in Bitcoin at $222 million

Mining profitability

The Puell Multiple, another on-chain indicator, is the third signal that Bitcoin is creating a macro bottom.

The Puell Multiple investigates the profitability of mining and how it affects market pricing. The indicator does this by calculating a ratio between the daily coin issuance (measured in USD) and the daily coin issuance 365-day moving average (in USD).

Strong Puell Multiple readings indicate that mining profitability is higher than the annual average, indicating miners could sell off their Bitcoin reserve to increase profits. As a result, macro tops are known to coincide with increased Puell Multiples.

On the other hand, a lower Puell Multiple rating indicates that the miners’ current profitability is lower than the annual average.

As a result, mining rigs that earn break-even or less money from mining bitcoin run the danger of going out of business and losing market share to competitors. In the past, selling pressure has been lessened by removing less capable miners from the Bitcoin network.

The Puelle Multiple reading on July 25 is interesting since it is in the green box and is close to the levels seen during the March 2020 crash and the 2018 and 2015 price bottoms.