Bitcoin (BTC) is showing signs of an impending bull market, with a rarely seen signal giving rise to predictions of a major price surge. A key on-chain metric, the Puell Multiple, has just given a bullish signal that suggests Bitcoin could be set for a price increase of up to 90%. This indicator has historically been a strong predictor of price rallies, and many analysts are now watching it closely for signs of the next big move in Bitcoin’s market.

Understanding the Puell Multiple

The Puell Multiple is an analytical tool that measures the daily value of newly mined Bitcoin against its 365-day moving average. This metric offers insight into Bitcoin’s mining profitability, helping analysts gauge market conditions and sentiment from the perspective of Bitcoin miners.

When the Puell Multiple crosses above its 365-day moving average, it is seen as a signal of a potential price increase. Over the last five years, this event has only occurred three times, and each time, Bitcoin experienced significant price growth shortly afterward. The last instance of a Puell Golden Cross was in January 2024, which was followed by a 76% increase in Bitcoin’s price.

Historically, these breakouts have been followed by notable price rallies: March 2019 saw an 83% price rise, while January 2020 witnessed a surge of 113%. Based on past trends, Crypto Quant, the analytics platform that tracked the signal, suggests that Bitcoin could see a 90% price increase if this pattern repeats.

The Importance of the Current Market Conditions

In addition to the technical indicator, Bitcoin’s market is supported by favorable macroeconomic conditions. The current financial environment, marked by inflation and a tightening of global monetary policies, has made Bitcoin an attractive store of value for many investors. This has contributed to increasing demand for Bitcoin, further supporting the likelihood of a significant price rally.

Many analysts point to Bitcoin’s growing role as a hedge against economic uncertainty, which may add fuel to the bullish sentiment. These factors suggest that the combination of the Puell Multiple’s breakout and a favorable macroeconomic environment could lead to a powerful rally for Bitcoin in the coming months.

RSI: Bitcoin’s Bullish Momentum Intensifies

Another indicator suggesting that Bitcoin may be poised for further gains is the Relative Strength Index (RSI). This tool measures the strength of price movements by comparing the magnitude of recent gains to recent losses. Currently, Bitcoin’s monthly RSI is sitting at 74.4, indicating that the cryptocurrency is entering the “overbought” territory. While this might suggest that Bitcoin could be due for a short-term correction, historically, Bitcoin’s RSI tends to stay above 70 throughout strong bull runs.

Analysts such as PlanB, the creator of the Stock-to-Flow model, have noted that when Bitcoin’s RSI stays elevated, it usually signals that the cryptocurrency is entering a prolonged bull market. The RSI’s current reading suggests that Bitcoin is still in the early stages of a potential parabolic rally, making it possible for the cryptocurrency to continue rising over the next few months.

What Could a 90% Bitcoin Rally Mean?

If the current patterns hold and Bitcoin experiences a 90% price increase, it could see the price reach new all-time highs. Bitcoin’s previous highs have been in the range of $69,000, so a 90% rally could push BTC towards $130,000 or even higher.

The growing interest from institutional investors, coupled with the increasing use of Bitcoin as a hedge against inflation, could drive this rally. Additionally, many market participants are anticipating the halving event in 2024, which has historically been a catalyst for Bitcoin price rallies.

Potential Risks in the Market

While the outlook for Bitcoin is positive, it’s essential to acknowledge the risks that come with investing in such a volatile asset. Despite the bullish technical indicators, Bitcoin’s price remains subject to sharp corrections, particularly if retail investors rush into the market in anticipation of further gains.

Moreover, FOMO (Fear of Missing Out) is often a double-edged sword, as it can lead to market overheating, followed by significant pullbacks. Traders and investors will need to be cautious and avoid being overly exposed to the market at the height of the rally.

Conclusion: Bitcoin’s Path Ahead

Bitcoin is showing promising signs of a strong bull rally as it breaks key technical levels, like the Puell Multiple Golden Cross, and rides favorable macroeconomic conditions. While this indicator has historically preceded large price gains, the possibility of a 90% rally in the coming months is now within reach.

However, the market’s inherent volatility remains a challenge, and investors should remain vigilant, prepared for both upside potential and possible corrections. As Bitcoin approaches new highs, both technical analysis and market sentiment will play key roles in shaping its path.