Key Points
- Bitcoin’s Puell Multiple suggests there is room for the price to appreciate.
- The Market Value to Realized Value (MVRV) Long/Short Difference also supports a higher Bitcoin price.
Despite recent red candlesticks, some on-chain metrics suggest the bull run for Bitcoin (BTC) may not be over.
Understanding Bitcoin’s Puell Multiple
The Puell Multiple is a metric that provides insights into Bitcoin’s valuation by analyzing miners’ revenue. It uses a 365-day moving average to determine if the coin is at a cycle top or if there’s potential for price appreciation.
Historically, when the Puell Multiple surpasses a reading of 3, Bitcoin has reached the peak of the bull market. For instance, before the price of Bitcoin began to plunge, the metric hit a value of 8.13. In 2017, the Puell Multiple reached 6.12 before the bull market ended.
Currently, the Puell Multiple is at 0.90, suggesting that Bitcoin’s price has the potential to rise. However, the reading has dropped from the last one each time the next cycle hit its peak, indicating that the reading might not surpass 3 before Bitcoin’s price peaks.
Market Value to Realized Value (MVRV) Long/Short Difference
Another metric suggesting a higher Bitcoin price is the MVRV Long/Short Difference. This metric compares the value at which each Bitcoin holder purchased the coin to its current price.
When the MVRV Long/Short Difference is at 0%, it indicates the end of a bear market. Conversely, when the metric is nearly 100% or above, it suggests the end of a bull market.
According to this metric, Bitcoin’s bear market ended around March 2023, marking the start of the current bull cycle. The highest the MVRV Long/Short Difference has reached this cycle is 41%, suggesting that Bitcoin’s price could trade higher than its March peak.
Based on the difference in this cycle’s metrics and those of 2021, Bitcoin could potentially hit $85,000. However, the $100,000 prediction mentioned frequently may be difficult to achieve. Whether the price hits this landmark or not, it could still be a good deal for Bitcoin believers.
