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What does the Puell Multiple say about the current Bitcoin bear?

Puer multiples are indicators that have historically given hints about previous Bitcoin cycles. Regarding the current bear market, he said:

Bitcoin puer multiples have risen in recent months

According to Glassnode’s latest weekly report, miners are currently earning just 63% of last year’s revenue.

The “puer multiple” is a metric that measures the ratio of current Bitcoin miner earnings to their 365-day moving average.

What this metric tells us is how current miner earnings compare to last year’s average.

If the multiple value is greater than 1, it means the miner is currently earning more than the average of the last 365 days.

On the other hand, a metric with a value less than the threshold suggests that the miner’s income is currently low.

Well, here is a chart showing the trend of Bitcoin Puer multiples over the last few years.

Looks like the value of the metric has been showing a rise in recent weeks | Source: Glassnode's The Week Onchain - Week 40, 2022

As you can see in the graph above, the historical zones of Bitcoin Puer multiples are highlighted. In past cycles, the bottom seems to have formed as a result of the indicator falling below the 0.5 value.

After a previous bear market saw the indicator reach lows and then recover from the zone, cryptocurrencies have also observed the end of a bear market and the beginning of a new bull market.

The likely reason behind this trend is that when miners reach very low returns, they go through a surrender phase, and when it ends, the selling pressure from miners subsides and the price rises to some extent.

Related reading: Bitcoin Price Starts Uptober With Record Open Interest Rise, Will BTC Rise Be Short-lived?

In June of this year, the metric appears to have hit a low of just 0.33, suggesting miners were earning only 33% of their average over the past year at that point.

However, the multiple has enjoyed an overall trend since then, breaking out of its past bottom zone as its value is currently at 0.63. This means that miners are much less stressed now than they were just a few months ago.

Historically, the current Bitcoin Puer multiple uptrend could mean the end of the bear market.

BTC price

At the time of writing, Bitcoin’s price is hovering around $20,000, up 4% over the past week.

bitcoin price chart

The value of the crypto seems to have spiked up over the past day or so | Source: BTCUSD on TradingView
Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, Glassnode.com

What does the Puell Multiple say about the current Bitcoin bear?

Source link What does the Puell Multiple say about the current Bitcoin bear?

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