Bitcoin Overheated? Puell Multiple Hits Levels Not Seen Since Late 2021

By Tsunami On May 13, 2023

In the world of cryptocurrency investing, the Puell Multiple is one of the most closely watched metrics for identifying the best times to buy and sell Bitcoin. And according to recent reports, the Puell Multiple is currently at levels that have not been seen since the late 2021 bull market.

For those unfamiliar with the Puell Multiple, it is an on-chain indicator that takes into account the daily issuance value of Bitcoin in USD, divided by the 365-day moving average of the same value. Essentially, it helps investors identify when Bitcoin is over or undervalued relative to its long-term average.

Historically, the Puell Multiple has been a reliable indicator of when to buy and sell Bitcoin. In general, it is considered a good time to buy when the Puell Multiple is below 0.5, and the best opportunities arise when it is below 0.4. However, it’s important to note that these levels don’t occur very often.

Currently, the Puell Multiple is hovering around 2.0, which is a significant increase from its previous levels. In fact, during the 2017 bull market, the Puell Multiple only reached a peak of 7+, whereas during the 2021 bull market, it only hit 3.5.

According to experts, this suggests that Bitcoin’s price is well overheated and has likely reached its peak, similar to what was seen in the summer of 2019. Some even suggest that this could indicate that the true end of the bull market was in April or May of 2021, rather than November, despite the slightly higher price.

While it’s relatively easy to know when to buy Bitcoin based on the Puell Multiple, it can be more challenging to know when to sell or take partial profits. However, experts suggest that investors should keep a close eye on other on-chain metrics that show a similar picture to the Puell Multiple.

In summary, the current state of the Puell Multiple suggests that the Bitcoin market may have reached its peak, and investors should be cautious about investing further in this space. While the market can be unpredictable, keeping an eye on key metrics like the Puell Multiple can help investors make informed decisions about when to buy and sell Bitcoin.

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