Historically accurate at telling traders when price action is about to flip bullish, the Guppy is now repeating its April 2019 behavior.
Bitcoin (BTC) plans to move higher and further squeeze bears in the short term, several price indicators suggest.
As the week begins, a group of measurements — some surprisingly accurate historically — are combining to make traders firmly bullish on BTC.
Guppy repeats April 2019 bull signal
Leading the positive signs is a useful but somewhat forgotten indicator dubbed the Guppy. This is a collection of exponential moving averages which has flashed green on the daily chart for the first time in around 300 days.
The interval is significant — the last flip from red to green for Guppy was on April 9, 2019, coinciding with Bitcoin’s rapid rise to highs of $13,800.
Before that, Guppy also turned bullish on Jan. 14, 2018, when Bitcoin briefly rose above $9,000 on the way down from the all-time high a month earlier.
Bitcoin’s Guppy indicator bull and bear phases. Source: Hsaka/ Twitter
Puell Multiple: Mined Bitcoins almost cost too little
A second sign that bullish momentum is building for Bitcoin lies in the so-called Puell Multiple.
Used to identify the cryptocurrency’s price cycles, the tool allows traders to tell from a miner’s perspective when the value of newly-mined Bitcoins is historically too high or too low.
Puell spiked during the 2017 highs, bottoming a year later in January 2019 when BTC/USD traded at under $4,000.
At present, the indicator suggests Bitcoin is significantly closer to the “too low” area than its lifetime highs.
Bitcoin Puell Multiple with peaks and troughs highlighted. Source: Glassnode/ Twitter
$8K flips from resistance to support
Zooming in, steady enthusiasm is already creeping into traders’ forecasts once again. For regular Cointelegraph contributor Michaël van de Poppe, current action means $8,000 has now formed a fresh support level.
BTC/USD has gained around 3.8% since Friday, having bounced off local lows around $8,200.
“Nice breakthrough of $8,600 level and we’re back in the range. This means that the $8,000-8,100 level has now flipped as support,” he summarized in a Twitter update on Jan. 27.
Van de Poppe continued:
“Eyeing to see a retest of $8,500. Holding that and we can aim for $8,900.”
Mayer Multiple hints at a firm buying opportunity
A classic guidance signal for Bitcoin comes in the form of the Mayer Multiple, which is also firmly supportive of Bitcoin as a buying opportunity this week.
The brainchild of Proof of Keys organizer, Trace Mayer, the Mayer Multiple divines to what extent it is profitable to buy Bitcoin at a particular time.
To arrive at its conclusions, it uses the current Bitcoin price versus its 200-day moving average. When the multiple is below 2.4, Mayer says, long-term Bitcoin buys saw “the best long-term results.”
The current multiple is 0.97 and has been higher 63% of the time since Bitcoin was created eleven years ago.
Bitcoin Mayer Multiple with 2.4 boundary highlighted. Source: Mayermultiple.info
Source: Cointelegraph https://cointelegraph.com/