On-chain data shows that bitcoin’s puell multiplier has begun to leave the “buy” zone, a sign that the cryptocurrency may be heading towards a bullish momentum.
Bitcoin Puell Multiple has risen in price in recent days
As a CryptoQuant analyst points out mailThe BTC puell multiplier is currently breaking out of the historical buying zone.
The “pool multiplier” is an indicator that measures the ratio between miners’ daily earnings (in USD) and their 365-day moving average.
The value of this indicator tells you how much bitcoin miners are currently earning compared to the average for the last year.
When the value of the indicator goes up, it means that the income of miners is growing right now. This results in miners being more likely to sell and the price can be described as “overpriced”.
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On the other hand, a decrease in the values of the metric may indicate that the price is becoming more and more undervalued as the income of miners decreases.
And now here’s a chart showing the trend of the bitcoin puell multiple over the past few years:
The value of the metric seems to have observed some rise recently | Source: CryptoQuant
As you can see in the chart above, Bitcoin’s puell multiple has been in the “buy” zone quite recently.
Historically, this zone with indicator values below 0.5 has been a sign that the price of the cryptocurrency is currently undervalued. Bear bottom formations have taken place here.
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There is also an opposite area, the “sell” zone, in which multiplicity values greater than 4 are presented. Naturally, BTC is overvalued in this area.
More recently, the puell multiple has seen some gains and has now just broken out of the green. In the past, this has usually been a sign that the cryptocurrency is now moving towards a bullish momentum.
However, one thing should be noted: in the past, a break out of the region did not mean that a rally would necessarily begin immediately. It may take a few more months before a full launch begins.
At the time of writing, the price of Bitcoin is hovering around $21.9k, down 1% over the past seven days. Over the past month, the cryptocurrency has added 3% in price.
The chart below shows the price dynamics of the coin over the past five days.
Looks like the value of the crypto has sunk down during the last few days | Source: BTCUSD on TradingView
After holding above $22k for a week, Bitcoin appears to have dropped below that level in the last 24 hours.
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
Credit : www.newsbtc.com