In the past five years, this scenario occurred three times, and after this golden crossover, Bitcoin experienced significant price surges.
1️⃣ What Is Puell Multiple?
Puell Multiple helps us understand market cycles from a mining perspective.
It is a crucial indicator for evaluating mining profitability. This metric is calculated as the ratio of the daily value of newly issued Bitcoin (in USD) to its 365-day moving average. By comparing miners' short-term revenues with long-term averages, it provides insights into mining profitability.
Puell Multiple is often used to analyze the relationship between mining revenues and market movements.
2️⃣ Historical Insights
Over the past five years, Puell Multiple has crossed above its 365-day moving average three times, initiating a Bitcoin rally each time:
March 30, 2019 → Bitcoin surged by over 83%.
January 8, 2020 → Bitcoin gained over 113%.
January 9, 2024 → Bitcoin rose by more than 76%.
This data shows that after Puell Multiple settles above its SMA365, an average increase of around 90% in Bitcoin's price has historically followed.
✅ Conclusion
All these data points and the macroeconomic framework suggest that a strong bull rally might be on the horizon.
Puell Multiple, which allows us to make meaningful interpretations about mining profitability, indicates that Bitcoin could witness a price surge of up to 90% in the coming period. While relying on a single indicator is not ideal for making investment decisions, historical data, the ongoing rate-cutting cycle, and the potential for increased liquidity (QE has not yet occurred but is highly anticipated) suggest that a Bitcoin rally might be inevitable.
Thank you for reading! 🙏
Written by burakkesmeci
