Bitcoin’s Puell Multiple Dips Into Bullish Territory: Is A Breakout Coming?
September 25 2024 - 2:00AM
NEWSBTC
The Bitcoin Puell Multiple, a key on-chain metric used to assess
the profitability of Bitcoin miners, is currently signaling a
potential bullish reversal for the leading cryptocurrency.
According to a CryptoQuant analyst under the pseudonym Darkfost,
this metric has recently dipped into the “green zone,” a signal
historically associated with upward price movements for Bitcoin.
The analyst shared these insights earlier today on the CryptoQuant
QuickTake platform. Related Reading: Analyst Warns Of Short Squeeze
as Bitcoin Futures Market Heats Up Detailing The Green Zone And Its
Implication For Bitcoin’s Price The Puell Multiple measures the
relationship between Bitcoin miners’ short-term revenue and average
earnings over the past year. By comparing these figures, the metric
offers a glimpse into the overall profitability of miners and its
potential impact on the broader market. Miners, as key participants
in the Bitcoin ecosystem, influence market supply, and their
decision to either hold or sell mined Bitcoin can trigger
significant price movements. The Puell Multiple is divided into two
primary zones that provide crucial market insights: the “red zone”
and the “green zone.” The red zone, characterized by a value above
4, according to the CryptoQuant analyst, indicates that miners are
generating substantial profits. When miners are highly profitable,
they are more likely to sell their Bitcoin holdings, which can lead
to increased market supply and downward pressure on the price.
Historically, reaching the red zone has often preceded a market
correction. On the other hand, the green zone, defined as values
below 0.5, indicates that miners are operating with very low
profitability or even at a loss. When miners struggle to break
even, they may reduce their operations or shut down their mining
rigs altogether. This can decrease selling pressure in the market,
often creating conditions for a bullish reversal. According to
Darkfost, the Puell Multiple recently hit 0.5, signaling that
miners are currently in the green zone—a strong indicator that the
market could be poised for an upward shift. Bitcoin Current Market
Performance And Outlook While an upward momentum may be certain for
BTC, given the current trend in its Puell Multiple metrics, the
asset’s performance over the past few days has been quite
appealing. Particularly, following the US announced decision on the
Fed rate cut last Thursday, Bitcoin has seen a consistent increase
in price day after day, which has now brought its uptick in the
last week to nearly 10%. Currently, the asset trades for $62,830.
This trading price comes against the backdrop of Bitcoin seeing a
slight dip of 0.4% over the past day. Related Reading: Bitcoin
Price Eases Off Highs: Will Gains Be Cut Further? Regarding
prospects, renowned crypto analyst Ali on X has recently shared his
outlook on Bitcoin, disclosing that if BTC follows the last two
cycles, a market top could occur by October 2025. If this #Bitcoin
cycle follows the last two, we could see a market top in about a
year, around October 2025! pic.twitter.com/JJGpRcHbOA — Ali
(@ali_charts) September 24, 2024 Featured image created with
DALL-E, Chart from TradingView
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