On-chain data shows the Bitcoin Puell Multiple has recently declined into the historical bottom zone as BTC’s continued consolidation.
Bitcoin Puell Multiple is Now Below the 0.4 Level
As an analyst in a CryptoQuant Quicktake post explainedFor the first time in 2022, the BTC Puell Multiple fell below 0.40. The “Puell Multiple”Here refers to an on-chain popular indicator which keeps track of the relationship between daily Bitcoin miner revenues and the 365 day moving average (MA).
In this case, the daily miner revenues refers to USD values of BTC amounts that chain validators are compensated for by the mining network. Mines also generate revenue through another source. sourceThe transaction feesBut in the context the Puell Multiple is only relevant to the first component. This part of the Puell Multiple is often referred to as Issuance.
If this value is higher than 1 then miners have made more money from block subsidies than they did on average in the last year. It is also possible that if it falls below this threshold then the chain validators earn less than they usually do.
This chart shows the Bitcoin Puell Multiple’s trend for the past decade.
The Bitcoin Puell Multiple, as shown in the graph above, had risen earlier this year to a peak in April. BTC’s surge during the first three months of 2024 was mostly due to the rally.
It’s apparent from the chart, though, that the indicator had observed a sharp plunge under the 1 mark right after this peak. This is due to an event which had happened at the time: fourth Halving.
Every four years, Bitcoin’s blockchain has a periodic event called “Halvings” that cuts the BTC Block Subsidy by half. It is not surprising that Puell Multiple experienced a drop in value when the Issuance was halved at the last such event.
As BTC’s price has been showing a slow descent in the months since then, the USD value of the miner revenue has also been declining, which has naturally been reflected in the Puell Multiple. In its most recent decline, the indicator now sits below the level of 0.4.
In the past, this zone has been significant in determining the Bitcoin’s price. Quantitatively, as the graph shows, assets tend to bottom out when this metric is in that region.
Last time Puell Multiple reached this zone, the cryptocurrency was at its lowest point in bear markets in 2022. Given these past examples, it’s possible that the Bitcoin price would follow and show something similar this time.
It is important to note that the BTC price usually reaches a low only after a period of time spent in this area. It may take some time before BTC can rebound, as long as the current pattern continues.
BTC Price
Bitcoin attempted to surpass the $58,000 level during the day but was not able to do so. Its latest effort sent it to $57600.
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Source: www.newsbtc.com