Bitcoin Puell multiple leaves bear zone, bull rally here?

On-chain data shows that the annual rate of change in the bitcoin pivot multiple has moved out of the bear market zone, a sign that a bull rally could be here.

Bitcoin Puell has increased the rate of change for more than 365 days.

As one analyst at CryptoQuant pointed out. Post, this could be one of the first signs of a bull market comeback. “Puell more than one” is an indicator that measures the ratio between daily Bitcoin mining revenue (in USD) and its 365-day moving average (MA).

When the value of this metric is greater than 1, Miner Currently earning more than the annual average. On the other hand, values ​​below the threshold mean that the income of these chain verifiers is lower than normal.

As miners’ incomes change, these holders become more or less likely to sell BTC (depending on how the breakeven ratio has changed), a factor that which can affect the price of crypto. Thus, when the Puell Multiple is greater than 1, BTC may be considered overvalued, while being less than this value may suggest that the coin is undervalued.

The relevant indicator here is not the Puell Multiple itself but its Rate of Change (RoC). RoC shows the speed at which any metric changes its value over a specified period of time.

In particular, the 365-day RoC of the Puell Multiple is of interest in the current discussion. Here is a chart that shows the trend in this indicator during different bitcoin cycles:

Bitcoin Puell More than one

Looks like the value of the metric has spiked in recent days | Source: CryptoQuant

In the graph above, the quant has marked the relevant zone for the Bitcoin Pool multiple 365-day RoC. The crypto seems to have peaked in price whenever the metric has touched the red line, while mid-cycle highs have been set around the orange line.

And it appears that the bear markets have persisted while the indicator has been around the green line. It also seems that transitions into and out of bear markets have generally followed a dotted line historically.

Recently, as Bitcoin has grown exponentially, miners’ earnings have also increased, resulting in an increase in the Puell Multiple. As the chart shows, the 365-day RoC of the indicator has naturally seen some sharp increases in recent days.

With this spike, the metric finally crossed above the dotted line, which could mean, if past patterns are anything to go by, that the bear market is coming to an end, and crypto may be headed for a Moving has started Bullish trend. However, the analyst notes that it will still take some more price action before this breakout is fully confirmed.

BTC price

At the time of writing, Bitcoin is trading near $22,800, up 9% over the past week.

Bitcoin price chart

The value of the crypto seems to have been moving sideways in the last few days | Source: BTCUSD on TradingView

Featured image by Dylan Leagh on Unsplash.com, Charts from TradingView.com, CryptoQuant.com

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