Puell Multiple reaches the bottom of the bear market


In today’s on-chain analysis, Be[In]Crypto examines the Puell Multiple indicator to determine if Bitcoin (BTC) has already bottomed out in the current bear market. Historical data suggests that the indicator is currently in a buy zone.

The Puell Multiple, created by an analyst David Puel, is an indicator of the health of Bitcoin miners. It is calculated by dividing the daily issue value of Bitcoins (in USD) by the 365-day moving average of the daily issue value. It provides a powerful and elegant tool to assess market cycles from the perspective of miner profitability.

Performance of Puell Multiple with BTC cycle

If we look at the entire history of BTC trading, we see that the Puell Multiple has proven to be very accurate when trying to estimate the peaks and troughs of Bitcoin’s historical cycles. Three areas are marked on Glassnode’s long-term chart:

  • green/buy: the range from 0.3 to 0.5
  • white/neutral: the range from 0.5 to 4
  • red/sale: the range of 4-10
Graph by glass knot

In three cases of historical price highs (red circles) and in three cases of lows (green circles), the indicator indicated the extremes with high accuracy. Also, he visited the green shopping area two more times. This happened during and immediately after the COVID-19 crash in March-April 2020 and at the bottom of the summer 2021 correction (blue circles).

Interestingly, the 2021 market peaks did not see confirmation from the Puell Multiple. When setting the all-time high (ATH) at $64,900 in April 2021, the indicator reached a value of 3.22, while at the last ATH at $69,000 in November 2021, it was only 1.6.

Current Readings

The current reading of Puell’s multiple registered a low of 0.35 on June 17 and 0.37 on July 5. These are the lowest values ​​since December 2018, when Bitcoin was at the previous bear market low near $3,250.

It should be mentioned that the aforementioned COVID-19 crash and May 2021 correction did not bring the Puell Multiple back to such low levels.

Chart by glass knot

Historically, the indicator has stayed in the green, buying the zone for about one to three months before breaking out and signaling the start of a bull market. Currently, he has been there for about a month since mid-June. This suggests that while this is a good level for the start of a Dollar Average Cost (DCA) buy, we may be facing another test of lower levels.

This is also the conclusion reached by the analyst @TheChainRN, who tweeted his rendition of the Puell Multiple. He claims that at previous bear market lows, the indicator reached levels in the range of 0.28 to 0.31. Therefore, with current readings at 0.35, the market can wait for another decline, in which the Puell Multiple will hit all-time lows.

Source: Twitter

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