Bitcoin’s Puell Multiple Breakout Signals a Potential 90% Price Rally
Bitcoin is flashing rare bullish signals, with on-chain metrics pointing toward a potentially significant rally. According to a recent CryptoQuant Quicktake blog post published on Nov. 18, a classic BTC price indicator, the Puell Multiple, is nearing a breakout that has historically preceded major price surges.
Puell Multiple Hints at 90% BTC Price Upside
Bitcoin’s Puell Multiple—an indicator derived from the daily value of mined BTC relative to its 365-day moving average—is approaching a golden cross, a rare occurrence that has historically led to substantial price gains. CryptoQuant’s analysis shows that this metric has crossed its 365-day moving average (SMA365) only three times in the past five years, each time triggering a significant rally:
- March 2019: Bitcoin surged by 83% after the cross.
- January 2020: BTC gained 113% following the signal.
- January 2024: The most recent cross resulted in a 76% price increase.
Based on historical data, CryptoQuant estimates that Bitcoin could see an average price surge of 90% following a Puell Multiple breakout. This would push BTC into new bullish territory.
“Puell Multiple helps us understand market cycles from a mining perspective,” noted CryptoQuant contributor Burakkesmeci. “It is a crucial indicator for evaluating mining profitability.”
The Puell Multiple provides insights into miner stability and profitability. When the metric crosses above its SMA365, it often signals a turning point for Bitcoin prices, coinciding with periods of rapid appreciation.
Favorable Macro Conditions Boost Bullish Outlook
CryptoQuant emphasizes that the broader macroeconomic framework is creating a favorable environment for Bitcoin’s next big rally. Declining inflation, growing institutional adoption, and rising interest in Bitcoin as a hedge against macroeconomic uncertainty are aligning to support this bullish narrative.
“All these data points and the macroeconomic framework suggest that a strong bull rally might be on the horizon,” CryptoQuant stated.
RSI Indicates Bitcoin Bull Market in Early Stages
Additional indicators are also supporting Bitcoin’s bullish case. The Relative Strength Index (RSI), which measures market momentum, suggests that Bitcoin’s bull market is just getting started.
Historically, Bitcoin’s RSI tends to remain above its “overbought” level of 70 during bull runs. As of Nov. 18, BTC’s monthly RSI stood at 74.4, according to Cointelegraph Markets Pro and TradingView data. Analysts interpret this as a sign of sustained upward momentum.
Parabolic Phase and the FOMO Effect
Bitcoin’s parabolic phase, characterized by rapid price increases and heightened market activity, is reportedly underway. Analysts expect this phase to last around 300 days, culminating in a new macro top for Bitcoin.
Expectations of Bitcoin reaching six figures for the first time in history are growing. However, some caution that retail Fear of Missing Out (FOMO) could drive prices too high too quickly, potentially triggering a significant correction.
“Lots of people are about to become intimately familiar with the phrase Fear of Missing Out (FOMO) on this Bitcoin cycle,” said Preston Pysh, co-founder of The Investor’s Podcast, on the X platform.
Meanwhile, pseudonymous analyst PlanB, creator of the Stock-to-Flow (S2F) model, predicts the main FOMO wave will hit by early 2025, signaling the peak of this bull cycle.
Conclusion: Bitcoin’s Bullish Momentum Builds
With the Puell Multiple nearing a breakout, Bitcoin’s RSI indicating strong momentum, and favorable macroeconomic conditions, the stage is set for a potential 90% price rally. As Bitcoin gains over 40% in Q4 2024, optimism continues to grow, tempered by the need to navigate market corrections driven by retail activity.
For now, all signs suggest that Bitcoin’s next major bull run is just beginning.
