The Puell Multiple is showing signs of a potential breakout for Bitcoin, as it approaches its 365-day moving average. This scenario has previously led to significant price surges for Bitcoin. In the past five years, the Puell Multiple has crossed above its 365-day moving average three times, according to CryptoQuant. Every time it has happened, the price of Bitcoin has risen subsequently, as has the configuration of the global financial system.
Puell Multiple Indicates Mining Profits Could Trigger Bitcoin Bull Run
The Puell Multiple is an essential measure in identifying the length of cycles in the markets and especially from the mining profitability’ view. It measures the number of new Bitcoins being issued each day in USD against the 365-day moving average of the same value. This ratio is used to determine if miners are operating in the short term to make some quick money at the expense of long-term business indicators. A move above 365-day moving average is usually considered bullish in that it indicates revenues from mining are higher than typical, and this may be associated with upward market pressure.
Previously, every time the Puell Multiple was above the 365-day moving average, Bitcoin had significant price gains. For example, on March 30, 2019, the Bitcoin increased by more than 83%. There was another breakout on January 8, 2020, which gave a 113% return on Bitcoin investment. Later on, on January 9, 2024, the Bitcoin’s price increased more than by 76%. In the past, when the Puell Multiple moves above the moving average, the price of Bitcoin typically rises by an average of 90%.
Bitcoin Could See 90% Gain as Puell Multiple Points to Uptrend
Such a pattern means that the current positioning of the Puell Multiple could signal another big Bitcoin movement. Although past performance is no indication of future results, the information gathered suggests high likelihood of price rise in the following months. Furthermore, other macroeconomic factors such as continuous cuts in interest rates and indications of higher liquidity may also contribute to the bull run.
While there is significant danger in basing an investment decision on a single indicator it is evident that under the current market conditions Bitcoin could easily appreciate by as much as 90% within the near future. Consequently, more are waiting for this one to provide additional evidence of the uptrend.
