{"id":37732,"date":"2022-08-24T14:47:16","date_gmt":"2022-08-24T11:47:16","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=37732"},"modified":"2025-08-29T20:36:08","modified_gmt":"2025-08-29T17:36:08","slug":"what-is-the-puell-multiple-and-how-is-it-used","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/what-is-the-puell-multiple-and-how-is-it-used\/","title":{"rendered":"What is the Puell Multiple, and how is it used?"},"content":{"rendered":"<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Key points<\/h2>\n<ul class=\"wp-block-list\">\n<li>The Puell Multiple is an indicator designed to analyse bitcoin\u2019s long-term market cycles based on miners\u2019 revenue.<\/li>\n<li>The indicator is calculated as the ratio of the US\u2011dollar value of bitcoin\u2019s daily issuance to the 365\u2011day moving average of the US\u2011dollar value of daily issuance.<\/li>\n<li>The chief risk in using the Puell Multiple for trading decisions is misreading miner behaviour and misjudging mining profitability.<\/li>\n<\/ul>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Who devised the indicator<\/h2>\n<p>The Multiple, based on bitcoin miners\u2019 revenue, was proposed in 2019 by David Puell, the developer of another popular on\u2011chain indicator, <a href=\"https:\/\/forklog.news\/cryptorium\/chto-takoe-indikator-mvrv\" target=\"_blank\" rel=\"noreferrer noopener\">MVRV<\/a>. It gained popularity after a <a href=\"https:\/\/medium.com\/unconfiscatable\/the-puell-multiple-bed755cfe358\" target=\"_blank\" rel=\"noreferrer noopener\">publication<\/a> by the crypto enthusiast Cryptopoiesis outlining the indicator\u2019s utility.<\/p>\n<p>Rather than using a metric such as network hash rate, as in the <a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-hash-ribbons-indicator\">Hash Ribbons indicator<\/a>, Puell focused on mining profitability, reflected in the daily and annual average US\u2011dollar value of newly mined bitcoins. According to Cryptopoiesis, this allowed for a simple and accurate way to identify bitcoin\u2019s market cycles.<\/p>\n<p>The Multiple rests on the assumption that miners shape bitcoin\u2019s market cycles. Because they bear costs (electricity, hardware depreciation and so on) in \u201cproducing\u201d bitcoins, they must cover them by selling the asset on the market. Miners time sales around a notional break\u2011even point: the sale price should exceed costs.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">How the Puell Multiple is calculated<\/h2>\n<p>There are two variants of the formula.<\/p>\n<p>The first considers only bitcoin\u2019s issuance. It is calculated as the ratio of the US\u2011dollar value of newly mined bitcoins each day to the 365\u2011day <a href=\"https:\/\/forklog.news\/cryptorium\/moving-average-crypto-explained\" target=\"_blank\" rel=\"noreferrer noopener\">moving average<\/a> of the US\u2011dollar value of daily issuance. This variant is the most widely used in the crypto community and on on\u2011chain analytics platforms. Current readings can be viewed on <a href=\"https:\/\/academy.glassnode.com\/indicators\/coin-issuance\/puell-multiple\" target=\"_blank\" rel=\"noreferrer noopener\">Glassnode<\/a> or <a href=\"https:\/\/cryptoquant.com\/asset\/btc\/chart\/network-indicator\/puell-multiple\" target=\"_blank\" rel=\"noreferrer noopener\">CryptoQuant<\/a>.<\/p>\n<p>The second variant factors in not only issuance but also transaction fees. Because, over the long run, fees will account for a growing share of miner income due to the <a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-bitcoin-halving\">h<\/a><a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-bitcoin-halving\">alving<\/a>, which gradually reduces the block reward, Cryptopoiesis suggested including the US\u2011dollar value of fees earned by miners.<\/p>\n<p>In this version, the US\u2011dollar value of newly mined bitcoins is added to the fee volume paid on the network. The result is total miner revenue for the day, which is then divided by the 365\u2011day moving average of all daily miner revenues. This variant must be calculated manually. For data collection, the <a href=\"https:\/\/bitcoinvisuals.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Bitcoinvisuals<\/a> service is suitable.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">What the Puell Multiple is used for<\/h2>\n<p>The Puell Multiple was conceived as a way to identify price tops and bottoms in bitcoin\u2019s market cycles based on mining profitability. According to the description <a href=\"https:\/\/academy.glassnode.com\/indicators\/coin-issuance\/puell-multiple\" target=\"_blank\" rel=\"noreferrer noopener\">on the site<\/a> of Glassnode, miners are not inclined to sell excess bitcoin.<\/p>\n<p>The premise is that declining mining profitability leads only to \u201cforced\u201d sales by miners to cover costs. A rising Multiple\u2014i.e., improving miner profitability\u2014encourages miners to sell surplus coins. This logic underpins using the Puell Multiple to analyse bitcoin\u2019s market cycles.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Analysing bitcoin\u2019s price cycles with the Puell Multiple<\/h2>\n<p>Based on historical data, different services and market participants highlight various threshold levels to mark cycle tops or bottoms:<\/p>\n<ul class=\"wp-block-list\">\n<li><strong>Cycle top<\/strong>. Blockchain\u2011analytics platforms <a href=\"https:\/\/academy.glassnode.com\/indicators\/coin-issuance\/puell-multiple\" target=\"_blank\" rel=\"noreferrer noopener\">Glassnode<\/a> and <a href=\"https:\/\/dataguide.cryptoquant.com\/network-indicators\/puell-multiple\" target=\"_blank\" rel=\"noreferrer noopener\">CryptoQuant<\/a> place the top\u2014an indicative sell zone\u2014where the Multiple rises above 4. On <a href=\"https:\/\/www.lookintobitcoin.com\/charts\/puell-multiple\/\" target=\"_blank\" rel=\"noreferrer noopener\">Lookintobitcoin<\/a>, the comparable level is above 3.5.<\/li>\n<li><strong>Cycle bottom<\/strong>. On Glassnode, Lookintobitcoin and CryptoQuant, the bottom\u2014an indicative buy zone\u2014sits below 0.5.<\/li>\n<\/ul>\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/puell-multiple-fl-1-1024x488.png\" alt=\"\u0427\u0442\u043e \u0442\u0430\u043a\u043e\u0435 \u043c\u0443\u043b\u044c\u0442\u0438\u043f\u043b\u0438\u043a\u0430\u0442\u043e\u0440 \u041f\u044c\u044e\u044d\u043b\u043b\u0430 \u0438 \u043a\u0430\u043a \u0435\u0433\u043e \u0438\u0441\u043f\u043e\u043b\u044c\u0437\u043e\u0432\u0430\u0442\u044c?\" class=\"wp-image-182782\" width=\"820\" height=\"390\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/puell-multiple-fl-1-1024x488.png 1024w, https:\/\/forklog.com\/wp-content\/uploads\/puell-multiple-fl-1-300x143.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/puell-multiple-fl-1-768x366.png 768w, https:\/\/forklog.com\/wp-content\/uploads\/puell-multiple-fl-1.png 1291w\" sizes=\"auto, (max-width: 820px) 100vw, 820px\" \/><figcaption>Recommended bitcoin buy (green) and sell (red) zones on the Puell Multiple chart. Source: <a href=\"https:\/\/www.lookintobitcoin.com\/charts\/puell-multiple\/\" target=\"_blank\" rel=\"noreferrer noopener\">Lookintobitcoin<\/a><\/figcaption><\/figure>\n<p>These levels reflect analysts\u2019 views and their reading of historical data, and may change over time. For example, the two prior local peaks, in March 2021 and July 2019, sat below the 4 and 3.5 thresholds marked as cycle tops.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Risks and shortcomings of using the Puell Multiple<\/h2>\n<p>Using the Puell Multiple as an analytical tool for trading decisions can lead to unexpected losses. Several key risks merit attention during research and decision\u2011making.<\/p>\n<h3 class=\"wp-block-heading\">Mining profitability<\/h3>\n<p>The Multiple takes an overly general approach to market\u2011cycle analysis and implies that mining profitability depends solely on bitcoin\u2019s price. The mining industry\u2019s structure changes year by year; it has grown more complex, requiring careful capital\u2011allocation decisions.<\/p>\n<p>Mining returns can stem from diverse sources, including active trading or investments. It is hard to predict miners\u2019 future income streams and what, precisely, will prompt them to sell or accumulate bitcoin.<\/p>\n<h3 class=\"wp-block-heading\">Interpretation<\/h3>\n<p>Market conditions at the time the Multiple was devised may differ markedly from today\u2019s and future bitcoin cycles. The profitability measure embedded in the indicator\u2019s interpretation is too general and ignores the specifics of local market players. Misreading the Multiple can lead to faulty conclusions.<\/p>\n<h3 class=\"wp-block-heading\">Trading risks<\/h3>\n<p>The Puell Multiple is intended for analysing long\u2011term market cycles; it is not suitable for identifying short\u2011term trends.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Further reading<\/h2>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-bull-trap-in-trading-and-how-to-avoid-one\">What is a \u201cbull trap\u201d in trading, and how can you avoid it?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-short-squeeze\">What is a short squeeze?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-market-maker\">What is a market maker?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-decentralised-exchange-dex\">What is a decentralised exchange (DEX)?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-dollar-cost-averaging\">What is dollar\u2011cost averaging?<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>What is the Puell Multiple? What is it used for? What are its drawbacks and risks? Explained in cards.<\/p>\n","protected":false},"author":1,"featured_media":37733,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"3","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[2113],"tags":[2118,1267,1268],"class_list":["post-37732","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptorium","tag-101-trading-and-investing","tag-cryptocurrency-trading","tag-on-chain-analysis"],"aioseo_notices":[],"amp_enabled":true,"views":"116","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=37732"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37732\/revisions"}],"predecessor-version":[{"id":37734,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37732\/revisions\/37734"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/37733"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=37732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=37732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=37732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}