Key Bitcoin price indicator flashes its ‘fifth buy signal in BTC history’
The Puell Multiple just flashed a buy signal for the fifth time in BTC’s history, but its creator cautions that a plunging hashrate and China’s miner purge are important factors to consider.
The cryptocurrency market found itself in a state of cautious optimism on June 28 after Bitcoin (BTC) price briefly spiked above $35,500, renewing hopes that the bull trend will resume shortly.
Despite the bullish move, some analysts have warned that the failure to secure a daily close above the $35,000 resistance is a sign that traders are simply closing positions at each breakout to resistance, a hint that further downside could be in store.
According to David Puell, on-chain analyst and creator of the Puell Multiple, the indicator has just given its fifth Bitcoin buy signal in history.
The Puell Multiple focuses on the supply side of the Bitcoin economy, mainly Bitcoin miners and their revenue, and explores market cycles from a mining revenue perspective.
It is calculated by dividing the daily issuance value of BTC (in USD) by the 365-day moving average of daily issuance value.
The Puell Multiple equation and historical performance. Source: LookIntoBitcoin.com
As seen on the chart above, the indicator measures periods where the daily value of the Bitcoin issued reaches historic lows, represented by the green box, or historically high values, which are seen when the indicator climbs into the red box.
Past instances when the Puell Multiple indicated good buying opportunities include mid-2018, when the price of BTC crashed below $4,000 in the midst of the crypto winter and again in March 2020 when prices collapsed as a result of the Covid-19 pandemic.
It also provided traders with a sell signal in late 2017 as the price of BTC topped out at that cycle’s high point, as well during the Bitcoin bull market of 2013.
Not financial advise, just for study purpose!