Bitcoin’s price may experience a surge based on the recently announced Puell Multiple metric. This metric suggests that Bitcoin is currently undervalued, indicating the potential for future price increases. Let’s delve into the details of this metric and its implications.
The Puell Multiple metric holds important insights for Bitcoin. If Bitcoin fails to maintain the $67,000 support level, its price could drop to $64,000. Despite briefly reaching $72,000 earlier this week, Bitcoin encountered selling pressure and is currently valued at $67,536, representing a 2.69% decrease. Its market value stands at $1.331 trillion. Stay updated with the latest financial and business news on COINTURK FINANCE.
According to CryptoQuant’s analysis, the Puell Multiple indicator’s decline following Bitcoin’s halving event has significant implications for the market. Bitcoin halves the mining reward every four years, directly impacting miners’ earnings. Unless Bitcoin experiences a substantial increase to compensate for this reduction, miners will face a significant decrease in daily income.
The Puell Multiple measures the ratio between miners’ daily revenues and the 365-day moving average. The sharp decline in this ratio post-halving is due to the delay in adjusting the long-term moving average to the new mining reward reality. This adjustment period makes mining activities less profitable unless Bitcoin’s price sees a significant surge.
The current Puell Multiple range suggests that Bitcoin’s network value is currently low. The decrease in new Bitcoin supply, coupled with rising demand, has the potential to drive prices up. Investors may interpret the drop in Puell Multiple as a signal that the market is adapting to a new phase of scarcity, potentially paving the way for a market rally.
This situation will impact Bitcoin’s supply and demand dynamics in the mining sector and could signal an adjustment period that will lead to significant price movements in the future. Based on historical trends and Bitcoin’s post-halving behavior, it may take a few weeks for Bitcoin to make a breakthrough and enter the price discovery zone. Once this occurs, Bitcoin’s price could reach six-figure numbers. Consequently, it is possible for the BTC price to reach $100,000 by the end of this year.
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Disclaimer: This article does not provide investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and conduct their own research.