Puell's Multiple is an indicator that measures miners' profitability. I've set this up on the 1W chart and as you see it is on an all time low range, the 0.30 - 0.40 Support Zone. Every time since the genesis that this metric hit that zone (or came very close to it), Bitcoin was either making a Bear Cycle Bottom or a Bull accumulation before a major rally began.
To make this more interesting, I've plotted the RSI also but on the 1D scale. This shows that, with the exception of the COVID 2020 bottom, every time the 1D RIS hit or broke the 30.000 level within a Channel Down while the Puell Multiple was in its All Time Low Zone, it was a bottom and a major rally was in the making.
What do you think will happen this time? Feel free to share your work and let me know in the comments section!
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I forgot with my post the coins for you .... Thansk my dear friend!
jeremiahjones
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Be careful guys this indicator might not be a good buy signal right now due to the China miner ban. The Puell Multiple = daily issuance value divided by the 365-day moving average of daily issuance value. The daily issuance value pretty much tells us how many mined coins are entering the bitcoin markets due to miners constantly selling their mined coins. The current low is due to the fact that a lot of Chinese miners shut down their operations and the hashrate difficulty dropped significantly. This might be an outliner and is not a good signal. While the average daily issuance dropped down a lot, this could just be temporarily until the miners found new places to mine and could go up very soon very fast.
Even the creator of this indicator David Puell said on twitter: "Getting reports that the most awesomely-named indicator just gave its fifth buy signal in BTC history.
Looking good, yes, but remember that Puell Multiple reacts to hash rate movements too, and hash rate follows price, not the other way around." "Hash rate follows price AND other exogenous factors, as we have clearly seen with the China situation."
But maybe it doesn't matter and it is still a good opportunity to buy right now. I am bullish myself but I urge people to look into it themselves and make sure they understand what this means before you make a decision.
WolvesOkami
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Just break that 36k and 43k those people on shorting position will cut their positions and chase the price up.
kamil92
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How does this indicator works exactly? It cannot calculate profitability in a right way if it suggests that now is bad time for active miners.
Current price of BTC is -45% since the top
Current network difficulty is at 80 which is -55% from the top
That means, on average, the profitability of mining coins is now 20% HIGHER than it was at 64K. Meanwhile this indicator shows miners experience some kind of armageddon. Seems like a broken indicator to me.
BTW. I provided averages as of today. Yesterday there was even deeper dip in difficulty, bottoming at ~50 which is 13M lowest. Taking into consideration not averages, but just yesterday's day , the profitability was 80% HIGHER than at 64K. Ofc only for yesterday. The average now is +20% as said before.
jeremiahjones
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@kamil92, daily issuance value divided by the 365-day moving average of daily issuance value. Daily issuance value shows how many new coins are entering the bitcoin ecosystem. This indicator drop right now is due to the china miner ban and not because the profit went down. So it might not be a good signal right now as it usually is. But idk. The creator David Puell said on twitter: "remember that Puell Multiple reacts to hash rate movements too, and hash rate follows price, not the other way around." "Hash rate follows price AND other exogenous factors, as we have clearly seen with the China situation."
Ether2020
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Fantastic analysis! This kind of research is great and may give you an edge. There are many ratios and special indicators but I like this one! Together with Bitcoin halving cycles, long term trend and of course the 4 year cycle I think we are going to retest the old top this year at least. Once above that, things can move very fast. We have 6 months left and then a lot can happen.
I myself had analyzed the scenario from the bottom to now almost perfectly. Now I expect 41-42000 USD and then further see how the structure develops. We can also see a shortsqueeze soon if the price goes higher. The wall of fear ....
You can check out my analysis here:
Thanks my dear friend and keep up the great work! Top!
@SiscoJP, Yes it did perfectly. Now we can expect a re-test to the neckline and then we are goin to lift again. That is what should happen but you know, nothing is 100% sure ;-) Happy trading my friend!
kmganse7
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This is a great comparison. I think it at least shows that BTC will enter a consolidation phase.