• On-chain data suggests that the annual rate of change in the Bitcoin Puell Multiple has exited the bear market zone, which could be an indication of the return of the bull market.
• The Puell Multiple is an indicator that measures the ratio between the daily Bitcoin mining revenue (in USD) and the 365-day moving average (MA) of the same.
• When the Puell Multiple is greater than 1, BTC may be considered overvalued, while being lesser than this value might suggest the coin is undervalued.
Bitcoin, the world’s leading cryptocurrency, has been on a roller coaster ride for the last few years. After a rapid rise in 2017, it has been in a bear market for the past 2 years. However, recent on-chain data indicates that the tide may be turning in favor of the bulls.
The Bitcoin Puell Multiple is an indicator used to measure the ratio between the daily Bitcoin mining revenue (in USD) and its 365-day moving average (MA). It is calculated by taking the daily mining income divided by the 365-day MA. When the value of this metric is greater than 1, miners are making more money than the yearly average right now. Conversely, values below the threshold imply the revenues of these chain validators is less than usual.
The 365-day rate of change (RoC) of the Puell Multiple is of particular interest. This metric displays the speed at which any metric changes its value over a defined period. When the Puell Multiple is greater than 1, it suggests that Bitcoin may be overvalued, while being lesser than this value might indicate that the coin is undervalued.
Analysts have noticed that the 365-day RoC of the Puell Multiple has exited the bear market zone, which could be one of the first indications of the return of the bull market. This could mean that miners are making more money than usual and thus, they may be less likely to sell BTC. This could affect the price of the crypto positively, leading to a bull rally.
Therefore, this is an important metric to keep an eye on for anyone interested in the price of Bitcoin. The Puell Multiple and its rate of change could be a sign that the bear market may be coming to an end and that the bulls may finally be in control.
