Puell multiple is an indicator that has historically given hints about previous Bitcoin cycles, here’s what it says about the current bear market.
Bitcoin Puell Multiple has been rising over the last couple of months
Glassnode has released the weekly report that shows miners are currently making just 63% last year’s revenue.
The “puell multiple” is a metric that measures the ratio between the current Bitcoin miner revenues, and the 365-day moving average of the same.
This indicator shows us how miner revenue right now compares to the average over the past year.
If the multiple value is higher than 1, miners earn more now than they did for the last 365 days.
The metric that has values less than the threshold, on the other hand suggests lower miner earnings at the moment.
Here’s a chart showing the Bitcoin price trend over the past few years.
The value of the Metric seems to have been rising in recent weeks. Source: Glassnode’s The Week onchain Week 40, 2022| Source: Glassnode's The Week Onchain - Week 40, 2022
The graph above shows the highlighted historical areas for Bitcoin Puell Multiple. Indicator dipping below 0.5 seems to indicate bottom formation during past cycles.
The metric reached its lowest point during previous bear markets, but then recovered. Crypto also witnessed the end of bear market and the beginning of a new bull run.
This is likely because miners who have very low revenue levels go through a phase called capitulation. Once this period ends, selling pressure decreases and the price experiences some growth.
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According to the data, in June this year the metric was at a low point of 0.33. This means that miners had only 33% earnings compared with the past year.
The multiple has seen an improvement in its overall performance and is currently at 0.63. Miners now experience less stress than they did a few months back.
The current bullish trend in Bitcoin could signal the end to the bear market, if history is any guide.
At the time of writing, Bitcoin’s price floats around $20k, up 4% in the past week.
Cryptocurrency seems to be gaining in value over the last day. Source: TradingView - BTCUSD| Source: BTCUSD on TradingView
Maxim Hopman featured image on Unsplash.com. Charts from TradingView.com and Glassnode.com.