Bitcoin Puell Multiple Lifts Off From Buy Zone, Bull Momentum To Follow?
25 Juli 2022 - 09:00PM
NEWSBTC
On-chain data shows the Bitcoin puell multiple has started to leave
the “buy” zone, a sign that the crypto may be heading towards
bullish momentum. Bitcoin Puell Multiple Has Gone Up In Value
During Recent Days As pointed out by an analyst in a CryptoQuant
post, the BTC puell multiple is currently breaking out of the
historic buy zone. The “puell multiple” is an indicator that
measures the ratio between the daily miner revenues (in USD) and
the 365-day moving average of the same. What this metric’s value
tells is how much Bitcoin miners are currently making compared to
the average for the past year. When the value of the indicator
rises, it means miner revenues are going up right now. This leads
to miners becoming more likely to sell and the price may be called
“overvalued.” Related Reading | On-Chain Data: Bitcoin Whales
With 10k+ BTC Have Been Growing On the other hand, decreasing
values of the metric can suggest the price is becoming more
undervalued as miner revenues are moving down. Now, here is a chart
that shows the trend in the Bitcoin puell multiple over the last
several years: The value of the metric seems to have observed some
rise recently | Source: CryptoQuant As you can see in the above
graph, the Bitcoin puell multiple was in the “buy” zone until just
a little while ago. Historically, this zone with indicator values
less than 0.5 has been a sign that the price of the crypto is
currently undervalued. Bear bottom formations have taken place
here. Related Reading | Bitcoin Funding Rate Remains Positive,
More Decline Soon? There is also an opposite area, the “sell” zone,
which represents values of the multiple greater than 4. Naturally,
BTC is overvalued in this region. Very recently, the puell multiple
has seen some uplift and has now just broken out of the green zone.
During the past, this has usually been a sign that the crypto is
now heading towards bullish momentum. One thing should be noted,
however, that in the past a breakout from the region doesn’t mean a
rally would necessarily begin immediately. There could still be a
few more months of buildup before a proper run can begin. BTC Price
At the time of writing, Bitcoin’s price floats around $21.9k, down
1% in the last seven days. Over the past month, the crypto has
gained 3% in value. The below chart shows the trend in the price of
the coin over the last five days. Looks like the value of the
crypto has sunk down during the last few days | Source: BTCUSD on
TradingView After holding above $22k for about a week, Bitcoin
seems to have dipped below the level over the past 24 hours.
Featured image from Kanchanara on Unsplash.com, charts from
TradingView.com, CryptoQuant.com
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