Recent on-chain data indicates that the Bitcoin Puell Multiple has entered the “undervalued” region for the first time in over a year.
Bitcoin Puell Multiple Experiences Recent Decline
A recent analysis in a CryptoQuant Quicktake post highlighted a drop in the BTC Puell Multiple. This indicator tracks the ratio between Bitcoin miners’ daily revenue and the 365-day moving average (MA).
Miners earn income through block rewards and transaction fees, with the Puell Multiple only considering block rewards in miners’ revenue calculation.
The Puell Multiple measures revenue in USD, connecting it to the cryptocurrency’s price, influencing the block rewards’ value.
When the Puell Multiple is above 1, it suggests miners have earned above the yearly average, potentially indicating an overvalued asset. Conversely, a value below 1 implies miners are making less than usual, signifying undervaluation.
The 7-day MA Bitcoin Puell Multiple trend graph shows previous high levels during a rally to a new all-time high, followed by a recent sharp decline while the cryptocurrency’s price consolidates sideways.
The recent plunge in the indicator comes after the Halving event, reducing block rewards by half every four years, creating scarcity and potentially preparing for a market rally.
Bitcoin Price
Bitcoin is currently trading around $67,800, reflecting a 5% increase over the past week.
