Bitcoin Puell More Lifts From Buy Zone, Bull Momentum To Follow?
On-chain data shows that the Bitcoin puell multiple has started to leave the “buy” zone, a sign that the crypto may be heading for bullish momentum.
The Bitcoin Puell Multiple has increased in value in recent days
As pointed out by an analyst in a CryptoQuant post, the BTC puell multiple is currently breaking out of the historical buy zone.
The “Puell multiple” is an indicator that measures the ratio of the daily miner earnings (in USD) to the 365-day moving average of the same.
What the value of this metric tells you is how much Bitcoin miners are earning compared to the average for the past year.
When the value of the indicator rises, it means that the income of miners is going up right now. This causes miners to be more likely to sell, and the price can be called “overvalued.”
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On the other hand, decreasing values of the metric may indicate that the price is becoming more undervalued as miner earnings decrease.
Now, here is a chart showing the trend of the Bitcoin puell multiple over the last few years:
The value of the metric seems to have observed some rise recently | Source: CryptoQuant
As you can see in the graph above, the Bitcoin puell multiple was in the “buy” zone until a little while ago.
Historically, this zone of indicator values less than 0.5 has been a sign that the price of the crypto is currently undervalued. Bear bed 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 lifting and has now just broken out of the green zone. Lately, this has usually been a sign that the crypto is now heading towards bullish momentum.
One thing should be noted, however, that earlier a breakout from the region does not mean that a rally will necessarily begin immediately. There may still be a few months of build-up before a real race can begin.
BTC price
At the time of writing, Bitcoin’s price is hovering around $21.9k, down 1% in the last seven days. Over the past month, the crypto has increased 3% in value.
The chart below 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 $22ki for about a week, Bitcoin seems to have dipped below that level in the last 24 hours.
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
