Top Quant uses the puell multiple to point out a pattern that explains why the current Bitcoin bull cycle is only in the first phase.
The Bull Market Is Not Over, Phase 1 Has Just Begun
Puell Multiple= Mining Revenue USD ÷ 365 MA (Mining Revenue USD)
With the help of the metric, it becomes possible to say how much selling pressure miners are facing. When the indicator has high values, miner revenue is relatively healthy, thus miners aren’t compelled to sell. While low values could suggest they are facing considerable selling pressure.
Now, here is how the puell multiple changed during the 2011 and 2013 bull cycles:
The Puell Multiple vs the Bitcoin price during 2011 and 2013
The above graph numbers the different phases of these runs, and the colored zones help reveal the pattern of where the price heads next after touching each.
During a mid-cycle top, the price touches the yellow box. An end-of-cycle top is signaled when the value touches the red zone.
A new cycle doesn’t start until after a mid-cycle top post halving is reached. The below chart shows how the 2017 bull run looked like as well as how the current one may end up looking like:
The current Bitcoin bull run has just begun
Examining this graph makes it clear that the 2017 cycle also followed a similar pattern for the price vs puell multiple chart.
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Now, based on this pattern, it looks like the current bull run may only be in the first phase. If a similar trend continues to be followed, BTC should make a large move up next as the coin hits a new ATH.
At the time of writing, BTC’s price floats around $47.8k, down 1.5% in the last 7 days. Over the past month, the coin has accumulated 15% in gains.
Here is a chart for the trend in Bitcoin’s value over the past three months:
BTC continues on an overall downtrend | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from CryptoQuant, TradingView.com