Key Highlights
- A miner indicator tracked by 10X Research has triggered a buy signal after appearing 10 times in the past.
- Eight of the 10 previous signals were followed by gains, with a median return of 58.6% and an average return of about 41%.
- BTC is trading above $79,000 as investors watch the US Fed rate decision, the CLARITY Act vote and other major economic events.
Bitcoin may be setting up for another strong move after a Bitcoin miner indicator flashed a buy signal.
The signal was recorded by 10X Research, an institutional crypto and macro research platform, which said it has appeared 10 times before. Eight of those signals were followed by gains, while the latest one comes as Bitcoin trades above $78,000 during a busy week for the crypto market.
In a Monday post on X, 10X Research said the 10 previous signals produced a median return of 58.6%. The average return was about 41%.
In simple terms, Bitcoin rose in eight of the 10 previous cases. That gives the indicator an 80% positive record based on those 10 examples, although the two losing cases show that the signal can also be wrong.
Bitcoin miner signal points to a possible rally
The difference between the median and average return is worth noting. The median return of 58.6% means that when all 10 past results are placed in order, the middle result was a 58.6% gain.
The average return of 41% is the total result of the 10 cases divided by 10. Both numbers point to strong past gains, but they do not mean Bitcoin will repeat the same move this time.
There is also a clear warning in the past data. Two earlier signals were followed by losses of 24% and 40%. This means the miner indicator has not always been a sign that Bitcoin would keep rising. The small number of past signals also gives investors only a limited history to work with.
Bitcoin climbs above $79,000
The latest signal comes as Bitcoin has already started to recover. At the time of reporting, BTC is trading for $79.125, after gaining around 2.35% in the past 24 hours, according to CoinMarketCap.
This has pushed its market capitalization to around $1.58 trillion in value. Over the past month, Bitcoin has also surged about 25%.
The timing of the signal is also important because Bitcoin is entering a week packed with events that could move the wider market. Investors are watching the US Federal Reserve’s interest rate decision, a Senate vote on the CLARITY Act and a Bank of Japan rate decision.
Markets face a busy week ahead
The Federal Reserve is now at the center of the market’s attention. Goldman Sachs and JPMorgan expect the US central bank to raise interest rates by 25 basis points at its September meeting. Reuters reported that markets were pricing in about an 87% chance of a rate hike on September 14.
The change in expectations followed stronger August inflation data and a fresh rise in oil prices. Oil was trading above $103 per barrel, while the ongoing US-Iran conflict has added more pressure to global markets.
JPMorgan also expects another 25-basis-point rate increase in December. Higher interest rates can make assets such as Bitcoin less attractive to investors looking for higher returns, while oil prices, Treasury yields and the US dollar are adding to market pressure.
Against this backdrop, the Bitcoin miner signal gives traders another point to watch. Its past record shows that strong gains have followed most of its previous signals, but the two large losses also show why the 58.6% median return should not be treated as a promise of another Bitcoin rally.
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