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December 23, 2024

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image caption
Your Puell Multiple Indicator Guide to Understanding Bitcoin Market Cycles
Through Miner Revenue.


WHAT IS THE BITCOIN PUELL MULTIPLE INDICATOR AND HOW DOES IT WORK?

The Puell Multiple is a powerful tool for Bitcoin investors, analyzing miner
revenues to identify potential market tops and bottoms. Here’s how to read
it—and what it’s signaling today.
 * Author:
   Mark Mason
 * Publish date:
   Dec 18, 2024



The Puell Multiple is a powerful tool for Bitcoin investors, analyzing miner
revenues to identify potential market tops and bottoms. Here’s how to read
it—and what it’s signaling today.

 * Home
 * Markets

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In the world of Bitcoin investing, understanding market cycles is key to
identifying buying opportunities and spotting potential price peaks. One
indicator that has stood the test of time in this regard is the Puell Multiple.
Originally created by David Puell, this metric examines Bitcoin’s valuation
through the lens of miner revenue, offering insights into whether Bitcoin might
be undervalued or overvalued compared to its historical norms.

This article will explain what the Puell Multiple is, how to interpret it, and
what the current reading on the chart suggests for investors. For a real-time
look at this tool, check out the Puell Multiple chart on Bitcoin Magazine Pro.



The Puell Multiple Chart on Bitcoin Magazine Pro


WHAT IS THE PUELL MULTIPLE?

The Puell Multiple is an indicator that compares Bitcoin miners’ daily revenue
to its long-term average. Miners, as the “supply side” of Bitcoin’s economy,
must sell portions of their BTC rewards to cover operational costs like energy
and hardware. This makes miner revenue a critical factor influencing Bitcoin’s
price dynamics.






HOW IS THE PUELL MULTIPLE CALCULATED?

The formula is simple:

> Puell Multiple = Daily Issuance Value of BTC (in USD) ÷ 365-Day Moving Average
> of Daily Issuance Value

By comparing current miner revenues to their yearly average, the Puell Multiple
identifies periods where miner profits are unusually high or low, signaling
potential market tops or bottoms.


HOW TO READ THE PUELL MULTIPLE CHART

The Puell Multiple chart uses color zones to make interpretation
straightforward:

 1. Red Zone (Overvaluation)
    * When the Puell Multiple enters the red zone (above 3.4), it suggests miner
      revenues are significantly higher than usual.
    * Historically, this has coincided with Bitcoin price peaks, indicating
      potential overvaluation.
 2. Green Zone (Undervaluation)
    * When the Puell Multiple drops into the green zone (below 0.5), it signals
      that miner revenues are unusually low.
    * These periods have historically aligned with Bitcoin market bottoms,
      offering prime buying opportunities.
 3. Neutral Zone
    * When the Puell Multiple hovers between these levels, Bitcoin’s price is
      typically in a steady range relative to historical norms.







CURRENT INSIGHTS: WHAT IS THE PUELL MULTIPLE TELLING US?

Looking at the current Puell Multiple chart from Bitcoin Magazine Pro:

 * The Puell Multiple (orange line) is trending upward but remains well below
   the red overvaluation zone.
 * This suggests that Bitcoin is not yet in an overheated phase, where prices
   historically peak.
 * At the same time, the metric is far above the green undervaluation zone,
   signaling we are no longer in a market bottom phase.


WHAT DOES THIS MEAN FOR INVESTORS?

The current Puell Multiple reading points to Bitcoin being in a mid-market
cycle:

 * Bullish Momentum: With the metric rising steadily, the market appears to be
   moving into a bullish phase, though it remains far from “overheated.”
 * No Immediate Peak: The lack of a red zone reading suggests there may still be
   room for upside growth before a major correction.

Investors should monitor this chart closely in the coming months, particularly
as Bitcoin approaches its next halving event in 2028, which could further
influence miner revenues.


WHY THE PUELL MULTIPLE MATTERS FOR BITCOIN INVESTORS

The Puell Multiple offers a unique perspective on Bitcoin’s market cycles by
focusing on the supply side (miner revenue), rather than just demand. For
long-term investors, this tool can be valuable for:





 * Identifying Buying Opportunities: The green zone highlights periods of
   undervaluation.
 * Spotting Market Peaks: The red zone has historically aligned with major price
   tops.
 * Navigating Market Cycles: Combining the Puell Multiple with other indicators
   can help investors time their entries and exits more strategically.


STAY AHEAD OF THE MARKET WITH BITCOIN MAGAZINE PRO

For professional investors and Bitcoin enthusiasts looking to deepen their
analysis, tools like the Puell Multiple chart on Bitcoin Magazine Pro provide
essential insights into Bitcoin’s valuation trends.

By understanding the Puell Multiple and its historical significance, you can
make informed decisions and better navigate Bitcoin’s unique market cycles.

Disclaimer: This article is for informational purposes only and does not
constitute financial advice. Always conduct your own research before making
investment decisions.


Tags
terms:
On-chain AnalysisMiningBitcoin Magazine ProPuell Multiple
By
Mark Mason
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