These on-chain indicators say the “side winter” is over for Bitcoin

After six months of sideways volatility, several on-chain indicators suggest bitcoin may finally be poised for a major price breakout, analysts say.

These predictions line up with specific predictions about the upcoming bull market based on seasonal conditions, with Bitcoin moving from one of its worst-to-best months on record.

Bitcoin Bottom Lines

As noted by Amr Taha, author of CryptoQuant, Bitcoin's pool multiple has hit a low of 0.4 for the first time since the end of 2022 – the absolute bottom of Bitcoin's last bear market following the FTX crash.

The pool multiple is a ratio comparing the daily BTC against USD to the 365-day moving average. This is a measure of the profitability of a mine and is often used to identify market tops and bottoms, because mineral properties have a significant impact on price movements.

“The pull multiple is approaching a level where it historically represents buying opportunities,” the analyst said. “Investors seeking long-term accumulation levels may interpret a pull multiple near 0.4 as a sign that bitcoin is undervalued, or at least at a market level.”

Earlier this week, Bitcoin's hash rate hit a new all-time high, meaning miners are more competitive than ever to mine a block of Bitcoin. Meanwhile, the drop in BTC prices and the April BTC halving have significantly reduced the monetary rewards associated with successfully mining a block.

Mining problems are not the only bottom sign: Another CryptoQuant author – Axel Adler Jr. – noted that the number of active addresses on the chain dropped to its lowest level in July 2021, shortly after the Chinese mining ban was imposed.

Preparing for October

Finally, Bitcoin's average perpetual futures funding turned negative for the first time since September 2023.

“I think the market will make a decision in the next two weeks,” he said. “Unless there is a black swan event, I don't expect a big drop. After that we have to go up and try 70 km.

Bitwise released a note on Tuesday saying that while Bitcoin typically performs poorly in September, the next two months usually have some good performances. For example, the month of October yielded a 29.5% gain for BTC.

Central banks are cutting interest rates, which is typically positive for all financial assets. The ECB cut its deposit facility rate by another 12 basis points on Thursday.