Bitcoin’s price could potentially experience a rise, as indicated by the recently announced Puell Multiple metric. This metric suggests that Bitcoin is currently undervalued, which may signal a future increase in its value. Let’s delve into the details of this metric and its implications.
The Puell Multiple metric, analyzed by CryptoQuant, has shown that the drop in this indicator after Bitcoin’s halving event could have significant consequences for the market. Bitcoin undergoes a halving event every four years, reducing the mining reward per block. This directly affects the earnings of miners, leading to a substantial decrease in their daily income unless Bitcoin’s price compensates for this drop.
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 attributed to the slow adjustment of the long-term moving average to the new mining reward reality. Consequently, mining activities become less profitable unless there is a significant increase in Bitcoin’s price.
The current range of the Puell Multiple suggests that Bitcoin’s network value may be low. The decrease in the supply of new Bitcoins, coupled with potential rising demand, has the potential to drive up prices. The drop in the Puell Multiple can be seen as a sign that the market is adapting to a new scarcity phase, potentially paving the way for a market rally.
This situation will impact the supply and demand dynamics of Bitcoin in the mining sector. It may also indicate a period of adjustment that could lead to significant price movements in the future. Considering historical trends and Bitcoin’s behavior after halving events, it may take a few weeks for Bitcoin to make a breakthrough and enter the price discovery zone. Once this occurs, Bitcoin prices could potentially reach six-figure numbers. Therefore, it is possible for the price of Bitcoin to reach $100,000 by the end of this year.
It is important to 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.
For the latest financial and business news, you can visit COINTURK FINANCE. Stay updated with our news on Telegram, Facebook, Twitter, and Coinmarketcap.
