Analyst identifies 3 key indicators for Bitcoin growth

David Puell, an analyst at ARK Invest, has identified three promising indicators pointing toward potential growth in Bitcoin’s (CRYPTO:BTC) price. 

In his latest analysis, Puell observed key technical patterns and macroeconomic signals that suggest Bitcoin could break out of its current range. 

Puell highlighted that Bitcoin has bounced off its 200-day moving average and is now breaking out of an expanding wedge pattern, which has been forming since March. 

“Bitcoin has bounced off its 200-day moving average and is breaking the expanding wedge that has developed since March,” he noted. 

This technical setup, coupled with the return of short-term buyers, signals a renewed bullish sentiment. 

Another critical factor cited by Puell is the Stablecoin Supply Ratio (SSR), which measures the ratio of Bitcoin supply relative to stablecoins. 

A low SSR indicates a higher capacity for existing stablecoin reserves to drive Bitcoin purchases. 

Puell pointed out that the current SSR levels indicate Bitcoin is in an oversold condition, a situation not seen since mid-2022. 

“The Stablecoin supply ratio oscillator shows that Bitcoin is in an oversold condition at levels not seen since mid-2022,” he explained. 

The third indicator Puell discussed is the increasing global money supply (M2). 

He suggested that this rise in liquidity could act as a positive catalyst for Bitcoin. 

“A strong recovery was seen in Chinese stocks in September, indicating that global M2 liquidity is entering the market. 

We believe that Bitcoin can benefit from this overall liquidity,” Puell remarked. 

While these indicators present a compelling case for a potential price breakout, Puell emphasised the importance of risk management. 

He advised investors to assess these signals within the context of their strategies and risk profiles, noting that no forecast can guarantee future price movements.

At the time of reporting, the Bitcoin price was $66,703.17.