I stumbled across
this article which I thought was interesting. I've never been a fan of the Puell Multiple indicator, but it is now apparently leaving the buy zone:
Source:
https://www.lookintobitcoin.com/charts/puell-multiple/This metric looks at the supply side of Bitcoin's economy - bitcoin miners and their revenue.
It explores market cycles from a mining revenue perspective. Bitcoin miners are sometimes referred to as compulsory sellers due to their need to cover fixed costs of mining hardware in a market where price is extremely volatile. The revenue they generate can therefore influence price over time.
The Puell Multiple is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365-day moving average of daily issuance value.
In the referenced article, the writer claims (among other things):
Bitcoin has historically profited from Puell Multiple lift-offs, but unique macro conditions mean what happens next is uncertain.
As far as I can tell based on the current data, this isn't exactly the case however. In all previous bear markets, this indicator always returns to it's "buy zone" (after initially leaving it) while price usually consolidates.
So while it could be
yet another indicator of a bottom being confirmed, it actually suggests more price consolidation and a return to this buy zone as opposed to a "lift-off". I think this buy zone could otherwise be lowered from 0.5 to 0.4 and it'd give a much more accurate level for a buy zone. Also from the article, that seems more relevant than the previous quote:
The resulting multiple is used to determine whether a day's mined coins is particularly high or low relative to the year's average. From that, miner profitability can be inferred, along with more general conclusions about how overbought or oversold the market is.
It seems that this indicator is more relevant to network strength, given that it's based on miner profitability. To me it therefore suggests hash rate recovering, rather than immediate price recovery. This also fits the narrative that the
Hash Ribbons indicator is suggesting, that a slow recovery of hash rate is underway, as opposed to further capitulation of miners, based on the immediate trend.
TL:DR: I think this suggests hash rate recovering (after 6 weeks of decline), rather than immediate price recovery, even if the former often instigates the latter as a consequence.
Poll
