Bitcoin in ‘Accumulation’ Phase’
It’s time to re-start stacking bitcoin. This is the message from indicators that track tokens sold by miners and compare the market value of cryptocurrency to its fair value.
We get the Puell Multiple by dividing the daily issuance of bitcoins in US dollars by the 365-day average value. It fell below 0.5. This indicated that newly minted coins lost value compared to the yearly average.
In other words, the current profitability of individuals in charge of coin minting is poor. Historically, this has suggested an excellent time to build long-term exposure to bitcoin.
The term “daily issuance” refers to coins given to the ecosystem by miners as a reward for validating a fresh block of bitcoin transactions. Many miners have recently cut their crypto holdings in order to stay afloat as the value of the reward has fallen. Previous bear market bottoms have been accompanied by undervalued readings on the Puell Multiple.
Essentially, the indicator entered the green zone during the final leg of the bear market. It allowed for weeks of price consolidation and a subsequent resurgence.
The total monetary worth of the supply in circulation, by the daily average price across major exchanges, is Bitcoin’s market value or capitalization. By adding the market value of coins at the time they were last transferred on the blockchain, the realized value approximates the value paid for all coins in existence.
BTC Plunged 55% This Year
Bitcoin was last trading around $20,400, down 1% on the day. This year, the cryptocurrency has plunged by 55%.
The realized value accounts for lost coins and is closer to the cryptocurrency’s fair worth. As a result, the Z-score, which represents the variation of market value from realized or fair value, will determine whether the cryptocurrency is undervalued or overpriced.