An expert in quantitative analysis has identified a key on-chain indicator signaling bullish momentum for Bitcoin.
Bitcoin Puell Multiple Indicates Potential for Bullish Movement
According to a recent analysis shared in a CryptoQuant Quicktake post, the Bitcoin Puell Multiple is currently in a favorable “buy zone.” This metric tracks the relationship between BTC miners’ daily earnings and the 365-day moving average of the same.
Miners earn revenue by validating transactions on the network and are rewarded in BTC. This revenue is influenced by the cryptocurrency’s price fluctuations, with higher prices leading to increased earnings for miners and vice versa.
When the Puell Multiple is high, indicating that miners are earning significantly more than the annual average, the asset may be considered overvalued. Conversely, when miners earn less than the norm, the cryptocurrency could be undervalued.
Take a look at the Bitcoin Puell Multiple historical trend chart below:
The recent plunge in the Puell Multiple value | Source: CryptoQuant
The Puell Multiple had been correlating with Bitcoin’s recent rally but recently witnessed a sudden drop, indicating miners are earning less than the yearly average. This drop is attributed to the recent Bitcoin Halving event, where mining rewards were halved.
Despite the drop in the indicator, historical data suggests that such levels often precede bullish price movements for Bitcoin.
Current BTC Price
Bitcoin’s price has retraced to $61,300 after a failed recovery attempt from above $64,000.
Recent price drop in BTC | Source: BTCUSD on TradingView
Image sources: Dmytro Demidko on Unsplash.com, CryptoQuant.com, chart from TradingView.com
