CryptoQuant’s Puell Multiple indicates a potential end to the ongoin Bitcoin correction, suggesting a new bull rally may start in Q3 2024.
Recent data from CryptoQuant’s on-chain analytics suggests that Bitcoin is approaching a pivotal moment within its bull cycle. A key indicator, the Puell Multiple, has shown a significant drop, reminiscent of previous bull cycles.
An opportunity that comes once within a bull cycle
“This indicator fell significantly during the bull cycle in 2016 and 2020, followed by the beginning of #Bitcoin's strong rise. Currently, similar movements have been detected.” – By @DanCoinInvestor
Link 👇… pic.twitter.com/TAIzSbwio3
— CryptoQuant.com (@cryptoquant_com) July 9, 2024
According to the author of the report, Crypto Dan, this decrease in miner profitability could herald the end of a correction period and the start of a new bull rally in the third quarter of 2024.
The Indicator Has Fallen Again Sharply
The Puell Multiple is an indicator calculated by dividing the daily issuance value of Bitcoins (in USD) by the 365-day moving average of this value. Historically, it helps pinpoint periods when Bitcoin is either overbought or oversold.
Notably, in 2016 and 2020, significant drops in the Puell Multiple were followed by robust surges in Bitcoin’s price. Currently, in 2024, the indicator has again fallen sharply, suggesting a similar potential upward trend.
Historical Miner Data Trends
IntoTheBlock’s miner data provides additional context to these movements. The Miner Inflows and Outflows charts show distinct patterns corresponding to major market events.
For instance, during the bull runs of 2013 and 2017, both inflows and outflows spiked, indicating increased mining activity and subsequent selling. Similarly, 2020-2021 saw substantial inflows and outflows aligned with the bull market.
In 2023 to 2024, recent peaks in miner inflows and outflows have been followed by declines. This pattern suggests a reduction in mining profitability or a market correction phase.
In a May report, CryptoQuant’s CEO Ki Young Ju highlighted a significant revenue decline for Bitcoin miners, returning to early 2023 levels. This shift follows the recent halving event, reducing miners’ earnings amid stagnant Bitcoin prices.
Despite this, miners had not capitulated, choosing to hold onto their holdings in anticipation of future price increases. At the time, the Puell Multiple mirrored early 2023 revenue levels, underscoring the downturn in miner income.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
