Major Bitcoin Price Indicator “Puell Multiple” Gives Buy Signal, This Indicator’s Last 4 Signals in BTC History were Bang on Target
Bitcoin price against the US Dollar (BTC/USD) increased over the US$35,500 level on June 28, 2021, for a short period of time. This renewed hope that the bull market will start shortly. However, the price momentum couldn’t hold above the strong resistance at the US$35,000 level.
At press time, the Bitcoin price was hovering around US$34,630.73. Some analysts have warned that BTC/USD’s failure to secure a daily close above US$35,000 signals that the traders are still closing positions at every breakout to resistance. According to them, it is a clear signal that further downside is waiting to take place.
On-chain analyst and creator of the Puell Multiple, David Puell, has said that “Puell Multiple” indicator has indicated towards the 5th buying signal for BTC in history. This indicator mainly focuses on the BTC miners as well as their revenue. In addition, it also explores the market cycles of bitcoin from the perspective of mining revenue. Puell Multiple is calculated by dividing BTC’s (in USD) daily issuance value by the 365-day moving average of daily issuance value.
The last instances when the Puell Multiple indicated good buying opportunities are when the BTC price:
- Dropped below the US$4,000 level in mid-2018.
- Collapsed in March 2020 due to the COVID-19 pandemic.
Puell Multiple indicator had correctly provided traders with a sell signal in late-2017 when the Bitcoin price against the US Dollar topped out at the high point of the cycle. During 2013’s BTC bull market also Puell Multiple rightly gave the sell signal.
With the ongoing clampdown on the crypto mining industry by the Chinese authorities, many large mining farms have shut down and are relocating to other countries. This has made analysts expect a record drop in crypto mining difficulty as the hashrate plunges from historic highs.
While BTC makes some gains, David Puell has offered a word of caution.He asked traders to check other indicators in addition to “Puell Multiple” indicator to make trading decisions. He said:
“Hash rate follows price AND other exogenous factors, as we have clearly seen with the China situation.”