Bitcoin Price Could Experience a Surge, Suggests New Metric
The recently introduced Puell Multiple metric has hinted at the possibility of a rise in Bitcoin’s price. The metric currently indicates that Bitcoin is within a discount range, suggesting that its value may be relatively low. This price range could potentially signal an upward movement in the future. Let’s explore this metric and its implications further.
The Puell Multiple metric has gained attention for its ability to provide important insights into Bitcoin’s market. If Bitcoin fails to maintain its support at $67,000, there is a chance that its price could drop to $64,000. Despite briefly reaching $72,000 earlier this week, Bitcoin faced selling pressure and is currently valued at $67,536, representing a 2.69% decrease. The market value of BTC is recorded at $1.331 trillion.
According to CryptoQuant’s analysis, the Puell Multiple indicator has experienced a significant drop following Bitcoin’s halving event. Bitcoin halves the mining reward per block every four years, directly impacting miners’ earnings. Unless Bitcoin sees a substantial increase to compensate for this drop, miners will experience a significant decrease in their daily income.
The Puell Multiple metric measures the ratio between miners’ daily revenues and the 365-day moving average. The sharp drop in this ratio after the halving is attributed to the delay in adjusting the long-term moving average to the new mining reward reality. This situation also explains why mining activities become less profitable unless there is a significant increase in Bitcoin’s price.
The current Puell Multiple range suggests that Bitcoin’s network value may be relatively low. The decrease in new Bitcoin supply, coupled with rising demand, has the potential to drive prices upwards. Investors may interpret the drop in the Puell Multiple as a signal that the market is adapting to a new phase of scarcity, possibly setting the stage for a market rally.
This situation will impact the supply and demand dynamics of Bitcoin in the mining sector and could indicate an adjustment period that will pave the way for significant price movements in the future. Based on historical trends and Bitcoin’s behavior after halvings, it may take a few weeks for Bitcoin to experience a breakout and enter the price discovery zone. Once such a move occurs, BTC prices could potentially reach six-figure numbers. Consequently, it is plausible that the BTC price could reach $100,000 by the end of this year.
Please note that the information provided in this article does not constitute investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.
