The Puell Multiple is an indicator that measures Bitcoin miners' profitability by comparing the daily issuance of Bitcoin (in USD) to its 365-day moving average. This ratio offers insights into current market dynamics and can help identify periods of extreme overvaluation or undervaluation.
How It Works
The Puell Multiple is calculated by dividing the current daily issuance value (in USD) by the 365-day moving average of issuance. In other words, it tells you how today's miner revenue compares to the typical revenue over the past year.
365-Day Moving Average Issuance (USD)
This means you take the current daily issuance value in USD and divide it by the average daily issuance over the past 365 days.
Data Availability & Lag
Please note that the Puell Multiple value shown on our dashboard is based on yesterday's data. Since the full blocks mined data for today is not yet available, we are unable to calculate today's Puell Multiple. As a result, there is always a slight lag in this indicator.
Significance of Key Values
Historically, extreme values in the Puell Multiple have been associated with market turning points. A significantly high Puell Multiple may signal an overheated market, whereas a notably low value suggests Bitcoin might be undervalued relative to its historical trends.
Interpretation on Our Dashboard
On our dashboard, the Puell Multiple is visualized as a gauge that quickly communicates whether current miner profitability is within historical norms or if it has deviated into an extreme state. This helps in identifying potential tops or bottoms in the market.
Historical Significance
Over time, tracking the Puell Multiple has provided valuable context for understanding market cycles. Observing its trends has allowed investors to correlate extreme values with periods of market optimism or distress.
Limitations
While the Puell Multiple is a useful tool, it should not be used in isolation. Its signals are most reliable when considered alongside other market indicators and analyses.
Conclusion
The Puell Multiple provides a unique perspective on Bitcoin's market dynamics by highlighting shifts in miner profitability relative to a historical baseline. When used in combination with other indicators, it can help investors gain a more comprehensive view of market conditions.