September is a historically adverse month for financial markets, including bitcoin (BTC) and cryptocurrencies. However, there are signs that suggest the price correction could be coming to an end and that the digital currency created by Satoshi Nakamoto is giving buying opportunities before the end of the third quarter of 2024. One of the indicators is the Puell multiple, a metric created by David Puell that is used to detect entry and exit points in the marketbased on the profitability of the miners. As BitcoinDynamic already explained, the multiple is obtained by dividing the daily emission of the digital currency by the price of the day and the 365-day moving average of its price. In this way, You can set whether the miners' daily income is low or high.compared to the historical average. When the metric is less than 1, it means that miner revenue is below the annual average. This could be an indication of an upcoming bullish phase. If this multiple were greater than 1, it means that revenue is very high compared to the annual average, suggesting that BTC could enter a price correction. According to Amr Taha, a market analyst at CryptoQuant, the Puell multiple “has reached the 0.4 range for the first time since late 2022,” meaning that the asset “is undervalued, or at least approaching a market low.” In the chart he shared, you can see the Puell multiple (blue line) while the green boxes highlight the periods in which this indicator fell below 0.4. “Which often indicates market bottoms and strong buying opportunities,” Taha explains. The image shows how the BTC price responded (black line) in periods when the multiple was less than 1. As for the red shaded area, Taha clarifies that these are cycles in which the multiple was “extremely” high, between 4 and 6. “Often correlating with market tops and potential sell signals,” he adds.
According to the Puell Multiple, Bitcoin is giving buy signals. Source: CryptoQuant.
The catalyst that BTC needs
On September 18, the United States Federal Reserve (Fed) will announce whether or not there will be a cut in the interest rate, which could act as a catalyst for the price of the digital currencyThe United States is the world's leading financial power and for this reason each publication of macroeconomic data and monetary policy decisions has an impact on the markets. A cut in the interest rate causes an increase in Investors' appetite for assets considered «risky» such as stocks, bitcoin and cryptocurrencies. They are called this because they tend to generate higher returns but are more exposed to market fluctuations. On the other hand, if interest rates are high, investors seek refuge in “safer” assets such as Treasury bonds. This usually leads to falls (or at least less pronounced rises) in bitcoin, cryptocurrencies and the stock market.