On-chain data shows that the Bitcoin Puell Multiple has recently fallen to the historic bottom zone due to BTC’s continued consolidation.
Bitcoin Puell Multiple is now below the 0.4 level
As an analyst in a CryptoQuant Quicktake message explainedthe BTC Puell Multiple has fallen below 0.4 for the first time since the end of 2022. The “Puell Multiple” here refers to a popular on-chain indicator that tracks the ratio of daily revenue from Bitcoin miners to its 365-day moving average (MA).
Daily miner revenue here refers to the USD value of the BTC amount that the chain validators receive as compensation for solving blocks on the network. Miners also earn income from another source, transaction fees, but in the context of the Puell Multiple, only the first component, often called issuance, is relevant.
When the value of this ratio is greater than 1, miners are currently earning more income from block subsidies than the average of the past year. Likewise, the fact that it is below the threshold suggests that these chain validators are earning less than normal.
Here is a chart showing the trend in the Bitcoin Puell Multiple over the past ten years:
As shown in the chart above, the Bitcoin Puell Multiple had skyrocketed earlier this year and peaked in April. The rally mainly caused this surge that BTC witnessed in the first quarter of 2024.
However, the graph shows that the indicator has seen a sharp decline below 1 immediately after this peak. The reason behind this lies in an event that had taken place at that time: the fourth halving.
Halvings are periodic events programmed into the Bitcoin blockchain that permanently halve the BTC block grant every four years. With issuance halved in the last such event, it makes sense that the Puell Multiple recorded a crash.
As the price of BTC has slowly fallen in recent months, the USD value of miner revenues has also fallen, which is of course reflected in the Puell Multiple. With its latest downward move, the indicator is below the 0.4 level.
Historically, the zone below this 0.4 has proven to be significant for the Bitcoin price. As the quantitative indicator in the chart has highlighted, the asset has tended to form a bottom when the metric has been in this area.
The last time Puell Multiple was in this low was when the cryptocurrency hit a bear market low in 2022. Given these past examples, it is possible that the Bitcoin price could follow suit and show something similar this time.
That said, the price generally only bottoms out after BTC has spent some time in this zone. As such, it may take a while for the coin to achieve a rebound, assuming the pattern holds.
BTC price
Bitcoin has been trying to breach the $58,000 mark over the past day, but the asset has failed to gather enough momentum, with the latest attempt sending the coin to $57,600.
