As a seasoned analyst with years of experience in the crypto market, I have always been intrigued by on-chain indicators and their potential to predict price movements. The Bitcoin Puell Multiple is one such indicator that has caught my attention due to its historical bullish signals for BTC‘s price.
The data recorded on the blockchain indicates an imminent crossover of the Bitcoin Puell Multiple, which, in the past, has typically been associated with significant increases in Bitcoin’s value.
Bitcoin Puell Multiple Could Cross Its 365-Day MA In Near Future
According to an analyst’s post in CryptoQuant Quicktake, the Bitcoin Puell Multiple has been nearing its 365-day moving average (MA). The “Puell Multiple” is a frequently used on-chain metric that indicates how the income of Bitcoin miners compares to their yearly average.
Miners who work on verifying Bitcoin transactions have two primary income streams: transaction fees and a block reward (block subsidy). However, when discussing the Puell Multiple, it’s only the block reward that comes into play. Essentially, the block reward is the compensation miners receive for successfully adding new blocks to the Bitcoin network.
If the indicator exceeds 1, it signals that miners are presently generating more income than the annual average. Conversely, when it falls below the threshold, it indicates they are earning less than their typical earnings.
Currently, I’d like to present a graph illustrating the development of the Bitcoin Puell Multiple, along with its moving average over the past few years.
According to the graph, the Bitcoin Puell Multiple dropped below 1 at the start of the year, but more recently, it’s been rapidly climbing back up towards that level.
Earlier, Bitcoin experienced a significant drop due to the happening of its fourth halving event. In simple terms, “halvings” are pre-programmed changes within the blockchain system that reduce the reward for mining new blocks by half approximately every four years.
The Puell Multiple monitors the block reward, so it’s logical to assume that the Halving event will significantly impact its value. In Bitcoin (BTC), outside of the Halvings, the block reward remains relatively stable in terms of value and is distributed at a consistent pace.
However, the ratio’s value can still change at times other than Halvings because it measures the USD value of the miner revenue. The rewards that miners get are in BTC and so, their value is also tied to the USD rate of the asset.
Due to a significant surge in cryptocurrency values, miner revenue appears to have returned to levels comparable to the moving average over the past 365 days. Additionally, the Puell Multiple, which isn’t solely reliant on the 1 mark, has also risen close to its own 365-day moving average.
The graph shows that when the value crossed above this particular line on the previous three occasions, the expert pointed out an interesting trend: the asset saw a significant increase of at least 76%, every single time.
Time will tell if the Puell Multiple crosses this threshold, possibly indicating a positive trend for Bitcoin, or whether the test will prove unsuccessful.
BTC Price
Bitcoin’s bullish push seems to have slowed down lately, with the price moving horizontally rather than upwards. Currently, the cryptocurrency is being traded at approximately $91,900.
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2024-11-20 13:34