Bitcoin is expected to welcome a "new upward trend," as a key price indicator shows that the recent drop to $80,000 presents a prime buying opportunity.
Key Points:
The Puell multiple for Bitcoin has entered the discounted range, suggesting the market is undervalued.
The bullish flag pattern points to a short-term rebound to $96,000.
Data from CryptoQuant indicates that Bitcoin is in a buy-the-dip zone. The Puell multiple, which tracks the ratio of miners' daily income to the annual average, has returned to the discounted range as Bitcoin recently fell to a several-month low of about $80,500.
When the Puell multiple drops below 1, it indicates that miners' income is below normal, suggesting financial pressure and potential capitulation.
At 0.86, this indicator shows undervaluation and suggests that "the market is pricing Bitcoin below its fair value," said CryptoQuant analyst Gaah in a QuickTake analysis on Tuesday.
The last time this indicator was at such a low level was in April 2025, when Bitcoin was trading near $75,000, and then recorded a 50% increase before reaching a previous all-time high of $112,000 on May 22.
"Historically, all major pullback reversals have begun in these discount zones," the analyst said, adding:
Additionally, data from Capriole Investments shows that Bitcoin's MVRV Z-score—a metric that compares market capitalization to realized value and adjusts for volatility—has seen a significant decline, dropping to a two-year low on November 22.
Historically, all previous Bitcoin pullbacks have been accompanied by a noticeable decline in the MVRV Z-score, ending when the indicator falls below the green line (see chart below), indicating that Bitcoin is significantly undervalued.
At 1.13, the MVRV Z-score is approaching the green line, suggesting that the Bitcoin/USD pair may be forming a local bottom. Similar levels observed at the end of 2023 triggered an 80% price increase in the fourth quarter of 2023.
Data from Cointelegraph Markets Pro and TradingView indicates that Bitcoin's price has rebounded 8.6% from the local low of $80,500, with the bullish flag suggesting a short-term rebound.
The bullish flag began to take effect when the price broke above the upper trend line of the flag at $87,200 on Wednesday. The Bitcoin/USD pair is currently retesting this level to confirm the breakout.
If confirmed successfully, it will pave the way for an upward move to the flag's measured target of $96,800, a further increase of 10.6% from the current price.
Another argument supporting the bulls is the strengthening relative strength index, which has rebounded from the oversold state of November 22 to 51, indicating increased upward momentum.
However, veteran trader Peter Brandt warned on Tuesday that a rebound to $89,000 for Bitcoin could be a "dead cat bounce," followed by a new wave of decline.
As reported by Cointelegraph, the last round of leverage liquidation below $80,000 is still possible, as recent forced liquidations may not yet be over.
This article does not contain investment advice or recommendations. All investment and trading activities involve risks, and readers should conduct independent research before making decisions.
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Original: “Analysis: Bitcoin (BTC) Expected to Rebound from Current 'Discount' Zone to $96,000”
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