Glassnode Series: The Puell Multiple

The puell multiple

What is the Puell Multiple?

The Puell Multiple indicator focuses on the supply dimension of Bitcoin. Rather it focuses on Bitcoin miners and their revenue. Miners need to sell their BTC in order to keep their businesses running. This is due to electricity, mining hardware, A-C repair costs etc.

However, there are times when miners look to sell and times to HODL their BTC. The Puell Multiple indicator is based around the revenue generation from BTC miners. For example, in the green zones revenue generation for BTC miners is low. However in the red zones revenue generation is high.

How is the Puell Multiple calculated?

The Puell Multiple (PM) works by dividing the daily issued Bitcoins (in terms of USD) by the 365 day daily coin issuance MA (again in terms of USD).

Puell Multiple calculation

PM = Daily coin issuance (USD) / 365 MA daily coin issuance (USD)

From these calculations we then get the Puell Multiple displayed as a line, as shown below.

The PM – BTC

What cryptocurrencies does the Puell Multiple work on?

The Puell Multiple works only on BTC and LTC. It does not work on cryptocurrencies which use PoS, BFT, PoI etc. Therefore ETH, XRP and numerous cryptocurrencies cannot use the PM. This can be seen when you attempt to use the PM on SingluarityNET (AGIX).

PM only works on LTC and BTC

To learn more about the changing distributions in usage of consensus algorithms among the top 10 cryptocurrencies over time and whether alt coins are just a distraction, why not read our article on this?

Which cryptocurrency is the Puell Multiple most effective with? LTC or BTC?

The Puell Multiple was designed for BTC. The Puell Multiple is compatible with LTC, however due to being designed for BTC it is less effective with LTC.


How to read the Puell Multiple

On the left hand side y-axis there are numerical values ranging between 0.2 – 10. From here the Puell Multiple then has two boxes, the green and the red box. When BTC pushes up to the red box (4<x10) the PM recommends that Bitcoin holders take profits. However when BTC hits the green zone (x<0.5) the PM springs buy signals.

Let’s take a look at the historical success of the Puell Multiple.

PM BTC/USD – boxes

Historical success of the Puell Multiple

Sell signals

In the table below we can see the historical price action once BTC enters the red zone of the Puell Multiple.

CryptocurrencyDate BTC enters red zonePriceProceeding drop
BTC20/03/13$64 USDBTC drops from $229USD to $65USD in 4 months
BTC21/11/13$719 USDBTC drops from $1,100 USD to $172 USD in 3 months
BTC27/11/17$9,750 USDBTC drops from $20,000 USD to $3,000 USD in 12 months
Puell Multiple sell signals BTC/USD

Historically, once BTC has entered the red zone (red zone starts at numerical value of 4) the price sees an extension before a major sell off.

Buy signals

In the table below we can see the profitability of purchasing BTC when it enters the green zone of the PL.

CryptocurrencyDate BTC enters green zonePricePrice when red zone next seenPnL
BTC11/10/11$3.96 USD$64 USD+1,616%
BTC07/10/15$334 USD$9,750 USD+2,919%
BTC19/11/18$4,875 USDN/A (at time of writing)+802% (BTC at $39,100 USD at time of writing – PM 1.2)
Puell Multiple – BTC/USD buy signals

When BTC enters the green zone it typically sees further downside movement before taking off. For example, when BTC entered the green zone at $3.96 USD, BTC proceeded to see further downside movement towards $2.05 USD. However from a macro perspective, the Puell Multiple green zone does typically mark around the bottom.

Watch our guide on the Puell Multiple


Puell Multiple Conclusion

In conclusion, the Puell Multiple is great at identifying points to sell and buy from a long term perspective (the indicator is not designed to function on the short term). If you are looking to HODL BTC, the Puell Multiple indicator should be in your arsenal for potential macro entry and exit points.


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