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According to researcher Rekt Capital, the Puell Multiple — and the price of Bitcoin — might yet fall lower before a comeback takes hold.
Bitcoin (BTC) left traders guessing on June 30 with rangebound activity after a push past $37,000 resistance was met with denial.
Wyckoff stresses $32,300 support
Data from TradingView showed a day of reversal for BTC/USD on Wednesday, the pair down 4.5% hitting $34,500.
After gaining momentum the day before, Bitcoin ran out of steam around $36,630, triggering a pullback that wiped the majority of its gains.
Even the run higher, according to prominent trader Crypto Ed, lacked substance, and following the ensuing drop, a rebound was desperately needed to keep the bull argument alive.
“Stronger move down=start of move to green,” he added as part of comments alongside a chart showing a downside target of $26,900.
Others praised the Wyckoff price research approach, which is now popular for Bitcoin, for offering critical insights into where the currency’s short-term trajectory may be heading.
In his Wyckoff illustration, fellow trader Michael van de Poppe identified a region just around $32,000 as the do-or-die support level for BTC bulls.
“That would generate a higher low & strength towards further upwards momentum,” he informed his Twitter followers.
Wyckoff has not been as eagerly accepted by everyone, with Crypto Ed on Wednesday criticizing a general lack of understanding of the method’s principles and the potential for incorrect conclusions which could result.
Caution on Puell Multiple bottom
On-chain indications, on the other hand, remained optimistic, even though one in particular left space for another BTC price low.
That was the Puell Multiple, a famous indicator for detecting undervalued times in Bitcoin’s history, which is presently in its wide “undervalued” zone for only the sixth time in its history.
According to analyst Rekt Capital in a special video on Wednesday, Puell believes that miners have sold to pay costs, and given the market’s slide to the “undervalued” zone, a price bottom might occur shortly.
Nonetheless, the previous four bottoms in Puell did not exactly coincide with price bottoms, with the latter typically occuring shortly after the indicator turned higher.
“The fact that we’re in this green (Puell) Multiple region doesn’t necessarily mean to us that we’re at the very bottom,” he commented on the latest chart.
“The (Puell) Multiple could still go towards the downside and price could still follow it as well.”