Key Points
- Bitcoin’s Puell Multiple decline indicates a potential new bull cycle, according to CryptoQuant analyst Crypto Dan.
- A surge in Bitcoin’s miner reserves suggests miners are holding onto their coins in anticipation of a price rise.
Bitcoin’s Puell Multiple, a metric that tracks the profit of miners on the network, has seen a decline in the past month. This has presented a buying opportunity for market participants.
The recent drop in the Puell Multiple suggests a possible new bull cycle, as outlined in a report by pseudonymous CryptoQuant analyst Crypto Dan.
Understanding the Puell Multiple
The Puell Multiple compares Bitcoin’s daily issuance value to its 365-day moving average. A surge in the Puell Multiple can indicate that Bitcoin’s daily issuance is significantly above the yearly average, often signaling that Bitcoin is overvalued and due for a decline.
On the other hand, when the Puell Multiple decreases, it suggests that the daily issuance value is below the yearly average, indicating potential Bitcoin undervaluation. This is usually followed by a Bitcoin price spike as market participants “buy the dip.”
Bitcoin’s Current Puell Multiple
Currently, Bitcoin’s Puell Multiple is at 0.80, having started its cycle of decline on June 6th and since fallen by 54%. When examining Bitcoin’s historical performance, Crypto Dan found that when the Puell Multiple dropped during the bull cycles of 2016 and 2020, it was followed by a strong rise in Bitcoin’s value.
Dan suggests that a similar pattern could occur in the current market cycle, potentially leading to a bull rally within the third quarter of 2024.
Bitcoin Miner Reserves
In the past 24 hours, there has been a notable increase in Bitcoin’s miner reserves, a metric that measures the amount of coins held in miners’ wallets. This reserve indicates the amount of Bitcoin that miners have yet to sell.
At the time of writing, miner wallets held 1.82 million Bitcoin, valued at $104 billion. In the last 24 hours, the Bitcoin miner reserve has increased by 1%. This suggests that miners are choosing to hold onto their coins, possibly in anticipation of a price rise in the short to mid-term.
