What Does Puell Multiple Say About Current Bitcoin Bear?

Puell multiple is an indicator that has hinted at past Bitcoin cycles in the past, here’s what it says about the current bear market.

Bitcoin Puell Multiple has risen in recent months

According to the latest weekly report from glass nodeminers currently rake in just 63% of last year’s revenue.

the “puell multiple” is a metric that measures the relationship between Bitcoin miners’ current earnings and the 365-day moving average.

What this indicator tells us is how miners’ earnings now compare to last year’s average.

When the value of the multiple is greater than 1, it means that miners are currently earning more than the average of the past 365 days.

On the other hand, the statistic with values ​​below the threshold suggests that miners’ incomes are currently lower.

Here is a chart showing the trend in the Bitcoin puell multiple over the past few years:

Looks like the value of the metric has been showing a rise in recent weeks | Source: Glassnode's The Week Onchain - Week 40, 2022

As you can see in the chart above, the historical zones for the Bitcoin puell multiple have been highlighted. It seems that during past cycles, the indicator that plunged below the 0.5 value resulted in bottoming.

After the stat bottomed out during the previous bear markets and then recovered from the zone, the crypto also observed the end of the bear and the beginning of another bull run.

The probable reason behind this trend is that when miners hit very low earnings they go through a capitulation phase and once it ends the selling pressure subsides from them causing the price to see some growth.

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It appears that in June of this year, the statistic hit a low of just 0.33, implying that miners were earning just 33% of last year’s average at the time.

Since then, however, the multiple has seen a general trend and has escaped from the historical bottom zone, as the value is now 0.63. This means that miners are now much less stressed than a few months ago.

If history turns anything down, the current uptrend in the Bitcoin puell multiple could spell the end of the bear market.

BTC price

At the moment of writing, The price of Bitcoin hovers around $20k, up 4% over the past week.

The value of the crypto seems to have spiked up over the past day or so | Source: BTCUSD on TradingView

Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, Glassnode.com