Recent on-chain data suggests that the Bitcoin Puell Multiple is forming a pattern that historically indicates a bullish opportunity for the cryptocurrency.
Bitcoin Puell Multiple Reaches Low Levels
An analysis by CryptoQuant Quicktake indicates that Bitcoin may be presenting an opportunity that typically arises only once in a bull market cycle. The focus is on the “Puell Multiple,” which compares Bitcoin miner revenue to a 365-day moving average.
Miners earn from block rewards and transaction fees, but for the Puell Multiple, only block rewards, the primary income source, are considered. Block rewards refer to the BTC compensation miners receive for validating network blocks at a relatively fixed rate.
When the Puell Multiple is over 1, miners earn more than the yearly average. This can lead to increased selling pressure if the metric rises too high, indicating the asset may be overvalued. Conversely, values below 1 suggest lower earnings for miners, potentially signaling mining profitability issues.
The chart below illustrates the Bitcoin Puell Multiple trend over the past decade:
The graph shows the Puell Multiple previously exceeding 2, indicating high miner revenues due to a price surge. However, a recent significant drop to 0.7 suggests miners are facing challenges.
The decrease is partly attributed to the fourth Halving event on April 20th, which halves block rewards every four years. Historical data shows that drops in miner revenue have preceded notable price surges, hinting at a potential upcoming bull rally in the third quarter of 2024.
BTC Price Movement
Bitcoin has been attempting a recovery from recent lows but has struggled, reaching only $57,300.
