In today’s on-chain analysis, Happen[In]crypto It looks at the pull multiple indicator to determine if Bitcoin (BTC) has already reached the bottom of the ongoing bear market. Historical data suggests that the indicator is currently in a buying zone.
Puell Multiple Created by Analyst David Puelle, is an indicator of the health of bitcoin miners. It is calculated by dividing the daily issue price (in USD) of bitcoin by the 365-day moving average of the daily issue price. It provides a powerful and elegant tool for assessing market cycles from the perspective of profitability of miners.
performance of pull multiple with btc cycles
If we look at the entire history of BTC trading, we see that the pull multiple has proven to be very accurate in trying to predict the tops and bottoms of historical cycles for bitcoin. Three areas are marked on Glassnode’s long-term charts:
- green/buy: 0.3-0.5 . limit of
- white/neutral: 0.5-4 . limit of
- red/sale: 4-10 . limit of
In three cases of historical price peaks (red circles) and three cases of bottoms (green circles), the indicator indicated extremes with great accuracy. In addition, it visited the More Green Procurement Zone twice. This happened during and immediately after the COVID-19 crash in March-April 2020 and below the summer 2021 correction (blue circles).
Interestingly, the Puell Multiple was not confirmed at the 2021 market peak. During the establishment of an all-time high (ATH) of $64,900 in April 2021, the indicator reached a value of 3.22, while it was only 1.6 during the latest ATH of $69,000 in November 2021.
current reading
The current reading for the Puel Multiple was recorded at 0.35 on June 17 and 0.37 on July 5. These are the lowest values since December 2018, when bitcoin was under $3,250 in the last bear market.
It is noteworthy that both the above COVID-19 crash and the May 2021 correction did not bring the Puel Multiple to such a low level.
Historically, the indicator remained in the green, indicating the start of a bull market and a buying zone for about one to three months before leaving it. Currently, it has been around a month since mid-June. This suggests that Dollar Cost Average (DCA) is a good level to start buying, but we may be in for another test of lower levels.
This is also the conclusion reached by the analyst @TheChainRN, who tweeted his interpretation of the Puel Multiple. He claims that at the lows of the previous bear markets, the indicator reached the level in the range of 0.28-0.31. Therefore, with the current reading at 0.35, the market can look forward to another decline in which the pull multiple will reach all-time lows.
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