The on-chain data shows that the Bitcoin puell multiple has started to exit the “buy” zone, a sign that the crypto may be heading for bullish momentum.
Bitcoin Puell Multiple has increased in value in recent days
As one analyst pointed out in a CryptoQuant Publishthe puell BTC multiple is currently breaking out of the historic buy zone.
There “various” is an indicator that measures the ratio between the daily income of miners (in USD) and the 365-day moving average of these.
What the value of this metric indicates is how much bitcoin miners are currently earning compared to the average for the past year.
When the value of the indicator increases, it means that the income of miners is increasing at the moment. This leads to miners becoming more likely to sell and the price can be called “overvalued”.
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On the other hand, decreasing values of the metric may suggest that the price is becoming more and more undervalued as miners’ earnings decrease.
Now, here is a chart that shows the trend of the Bitcoin puell multiple over the past few years:
The value of the metric seems to have observed some rise recently | Source: CryptoQuant
As you can see in the graph above, the multiple of Bitcoin puell was in the “buy” zone until a short time ago.
Historically, this area with indicator values below 0.5 has been a sign that the crypto price is currently undervalued. bear down trainings have taken place here.
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There is also an opposite zone, the “sell” zone, which represents values of the multiple above 4. Naturally, BTC is overvalued in this region.
Very recently, multiple puell has seen some uplift and has now just come out of the green zone. In the past, this has usually been a sign that the crypto is now heading for bullish momentum.
One thing should be noted, however, that in the past a breakout from the region did not necessarily mean that a rally would begin immediately. There could still be a few months of buildup before a proper run can begin.
BTC price
At the time of writing, The price of bitcoin is floating around $21,900, down 1% in the past seven days. Over the past month, the crypto has gained 3% in value.
The chart below shows the price trend of the coin over the past five days.
Looks like the value of the crypto has sunk down during the last few days | Source: BTCUSD on TradingView
After holding above $22,000 for about a week, Bitcoin appears to have dipped below the level over the past 24 hours.
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com