Bitcoin Miners Are Not Yet Incentivized To Sell Their BTC, On-Chain Metric Shows
According to an on-chain indicator known as Puell Multiple, Bitcoin miners are not incentive to sell their coins at the current price level.
The Puell Multiple is a Bitcoin indicator that estimates how much profit mining pools are currently in compared to the one year historical average. It is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365-day moving average of daily issuance value.
With the help of the indicator, it becomes possible to know whether miners are likely to sell at a particular level or not. There are periods of time where the value of bitcoins being mined and entering the ecosystem is too great or too little relative to historical norms.
Understanding these periods of time can be beneficial to the strategic Bitcoin investor.
When the Puell Multiple assumes very high values, the price usually starts to top out as miners sell off their Bitcoin. On the other hand, low values may be seen during periods of bottoms.
The chart below shows the trend in the value of the Puell Indicator over the past years:
Puell Indicator | Source: Lookintobitcoin.com
As the above graph shows, the peaks formed by the indicator seem to have coincided with the tops in Bitcoin price.
The current Puell Multiple values are still relatively low despite the recent rise in the price of the cryptocurrency, meaning that miners may not feel pressure to sell at the current price level.
Back in May this year, when Bitcoin was in the same price levels as it is now, the indicator’s values were much higher. In other words miners likely feel much less pressure to sell right now than they did the last time BTC hit $65k.
At the time of writing BTC is trading around 57K level. If the Puell Multiple is anything to go by, there seems to be quite a lot room for Bitcoin price to go up from the current levels before the miners start to feel pressure to sell.
