Puell Multiple BTC | JeffreyTimmermans

29 Des 2024

The Puell Multiple is a metric that assesses the relationship between mining profitability and market cycles. It is calculated by comparing the daily value of newly issued coins (USD) to the 365-day moving average of daily coin issuance (USD).

This indicator works best on the 1D BTC Chart. When interpreting the Puell Multiple, it can generally be understood as follows:

• High values indicate that miner profitability is significantly higher than the yearly average. This may lead to an increased incentive for miners to sell off their holdings, putting additional selling pressure on the market.
  
  
• Low values suggest that miner profitability is lower than the yearly average. In this case, miners might experience financial strain, causing some to reduce their hash power by shutting down mining rigs. This, in turn, can reduce the number of coins being sold into the market, as remaining miners need to liquidate fewer coins to maintain operations, thereby decreasing the impact on the liquid supply.
  

The Puell Multiple is a metric used primarily in the cryptocurrency space, specifically for Bitcoin, to assess whether Bitcoin is overvalued or undervalued in relation to its mining rewards. It helps to gauge the profitability of miners and, by extension, to assess market conditions.

Use:
This Puell Multiple is invented for Long-Term, Trend Following Systems.

The Puell Multiple trend can be visualized through the color of the bars, which represents the direction of the trend, while the background indicates the strength of that trend.

• Bar Color: The color of the bars typically changes to reflect whether the trend is bullish or bearish. For example, green bars may indicate a strong bullish trend, while red bars signal a bearish or declining trend. The color coding helps to quickly interpret the market's overall movement in relation to mining profitability.
  
  
• Background Color: The background of the chart is used to reflect the strength of the trend. A darker or more intense background may signify a stronger trend, indicating that the market conditions are more pronounced, while a lighter background can suggest a weaker or more uncertain trend, showing less certainty in the market’s direction.
  

Together, the combination of bar color and background provides a clearer picture of both the trend's direction and its strength, making it easier to assess potential market behavior based on miner profitability and market cycles.

• Puell Multiple and Moving Average: They can be used as an extra tool to confirm the bullish or bearish trend. When the Puell Multiple is above the Moving Average, this will suggest and confirm that the trend is bullish.
  

How you score this for your own systems is up to you.

-Jeffrey

30 Des 2024

Catatan Rilis

Puell Multiple Top & Bottom Indicator for BTC

The Puell Multiple is a key metric for Bitcoin, calculated as the ratio of daily coin issuance (in USD) to its 365-day moving average. It provides insight into miner profitability and its influence on market cycles.

The Puell Multiple Top & Bottom Indicator enhances this analysis by applying a 14-day simple moving average to smooth short-term variations.

• High values: When the indicator reaches historically high levels, it suggests that miner profitability is elevated, signaling a potential market top. The default threshold for a "top" is a PUELL value above 3.0.
  
  
• Low values: Conversely, historically low levels indicate reduced miner profitability, often coinciding with market bottoms. The default threshold for a "bottom" is a PUELL value below 0.5.
  

This indicator is specifically tailored for identifying Bitcoin’s market extremes based on miner profitability trends.