Bitcoin in Accumulation Phase Despite Macro Headwinds, On-Chain Data Indicate

Long-term investors in bitcoin are adding to their stashes as prices decline, despite the generally bleak macroeconomic outlook, with some models suggesting the world's largest cryptocurrency could be undervalued at the current price range of $20,000-$21,000.

The Puell Multiple, a tool that measures one-year revenue growth among bitcoin miners, indicates there's buying interest among investors and, with a reading of 0.5, places bitcoin in a so-called green zone for those looking to build long-term exposure to the coin, CryptoQuant analysts told CoinDesk. The metric entered the green zone in the last leg of the previous bear market, which preceded weeks of price consolidation and a subsequent revival, as reported.

Current readings are just over the 0.5 level, described as a “green zone” for those looking to build long-term exposure to bitcoin. (CryptoQuant)

The Puell Multiple, calculated by dividing the daily issuance of bitcoins in U.S. dollar terms by the 365-day average of the value, indicates that newly minted coins are undervalued relative to the yearly average. For some observers, this shows that the current profitability for miners to sell bitcoin is relatively low – a move that has previously marked price bottoms.

The CryptoQuant analysts, however, cautioned that a price bottom is probably “still far” from being formed, citing fundamental concerns.

“The macro environment is not supporting the bitcoin price as USA economic data is still coming worst than expected,” they said. “Economic activity is decelerating faster than expected.”

The U.S. Federal Reserve is expected to continue raising interest rates aggressively, with some officials stating it is “unrealistic to expect easing anytime soon” – a sentiment that has added to concerns among investors.

Market analysts from crypto exchange Bitfinex said in a Monday note that bitcoin and ether are currently experiencing growth in the number of addresses holding the two cryptocurrencies.

The balance of holders has reached a record 12.92 million bitcoin and more than 60% of all bitcoin is stored by addresses that have had those spot positions for more than a year, the analysts said. The number of addresses holding between 1-10 bitcoin is about 750,000 and rising, they added.

“This persistent accumulation of bitcoin throughout bear markets demonstrates the numerous holders' strong commitment to and long-term belief in cryptocurrency,” Bitfinex’s analysts concluded.

Bitcoin was trades at about $19,700 as of publication time, and is down 0.3% in the past 24 hours.