Bitcoin (BTC) Key Indicator Pointing To A Bigger Rally Soon: Analyst

Axel Adler Jr, an analyst from the on-chain analytics platform CryptoQuant, has shed light on the potential for Bitcoin to see a bigger rally shortly based on key indicators.

Bitcoin price analysis for September 22 reveals a promising uptick in the world’s largest cryptocurrency’s value. After suffering losses in August, BTC has shown a strong recovery, surging by nearly 10% in the past two weeks alone.

After registering a 24-hour high of $66,000 earlier today, Bitcoin has seen a slight retracement and is currently trading at $63,508, showing a 0.58% decrease in the past 24 hours.

However, despite this minor setback, the asset’s seven-day performance remains in the green, with a 7.34% gain. BTC’s total market cap now stands at $1.21 trillion, while its 24-hour trading volume has also seen a significant increase, reaching $36.88 billion.

Bitcoin’s price performance has attracted the attention of several analysts, including Axel Adler Jr, an analyst at the on-chain analytics platform CryptoQuant.

Adler Jr has highlighted the potential for Bitcoin to see a bigger rally soon, based on key indicators.

Bitcoin’s key indicator pointing to a bigger rally

Adler Jr’s analysis focuses on a significant shift observed in Bitcoin’s market activity, which appears to be gearing the crypto market up for a bullish momentum.

One of the focal points of Adler’s analysis is the “Exchange Flow Multiple,” which plays a crucial role in understanding the movement of Bitcoin on exchanges.

This indicator measures the ratio between short-term (30-day) and long-term (365-day) Bitcoin inflows and outflows on exchanges. When this multiple declines, short-term exchange movements are considerably lower than long-term ones, which could point to decreased volatility.

Adler Jr elaborates on this by highlighting two primary factors that influence the decline of Bitcoin Exchange Flow Multiple.

The CryptoQuant analyst mentioned Long-Term Holders Retaining Assets as the first factor. Also referred to as “HODLers,” long-term Bitcoin holders, when not actively trading their assets, prefer to hold onto them with the expectation of future price increases, which can lead to a decline in exchange flow multiple.

The analyst also draws attention to the natural market correction and recovery process. The market typically needs time to stabilize after significant drops in Bitcoin’s price, and this stabilization period reduces exchange activity as investors wait for a clearer price direction. Adler Jr noted that a low exchange flow multiple in such contexts might reflect a “wait-and-see” attitude among investors, anticipating a favorable price shift before they re-enter the market actively.

Drawing parallels to 2023’s bull market

Adler Jr’s analysis further indicates that the current behavior of the Exchange Flow Multiple resembles patterns seen before previous rallies. Notably, similar low levels of the indicator were observed before the major market uptrend in 2023.

Related Reading: Bitcoin Breaks $66,000, But Analyst Warns Against Fresh Longs—Here’s Why

The CryptoQuant analyst disclosed that if history were to repeat itself, the current situation might set the stage for the next significant upward movement in Bitcoin’s price.

Bitcoin’s price analysis: Conclusion

Bitcoin’s price has shown promising resilience after recovering from August’s losses. Key indicators, such as the Exchange Flow Multiple, suggest that the upcoming period could bring a bigger rally for BTC.

However, it remains crucial to monitor the broader market dynamics and macroeconomic factors to fully gauge the direction of Bitcoin’s price in the coming weeks.

Disclaimer: The above� mentioned analysis is based on a recent observation and is not financial advice. Traders and investors should always conduct their own research before making any high-risk venture.