Bitcoin’s ‘Puell Multiple’ Flashes Misleading Bullish Signal
  Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets June 29, 2021 Sponsored by  (Price data as of June 29 @11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.
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Market Moves by  Bitcoin's 'Puell Multiple' Flashes Misleading Bullish Signal as China Bans Mining While a key bitcoin (BTC) indicator shows the currency is undervalued and ripe for a price bounce, the reading might be misleading, one observer says.
"The Puell Multiple is flashing a buy signal," Ben Lilly, a crypto economist at Jarvis Labs, noted in a Substack post published on Monday. The metric, however, is tied to miners and may be distorted by China's mining ban, he said.
The multiple, the ratio of the daily issuance of bitcoins in U.S. dollar terms and the 365-day moving average of the daily issuance value, has dropped below 0.5. That indicates the value of the newly issued bitcoins daily is relatively low compared with historical standards.
A sub-0.5 reading on the indicator created by analyst David Puell has marked miner capitulation and bear-market bottoms in the past, according to data provided by lookintobitcoin.com.
Daily issuance refers to the number of new coins supplied to the ecosystem by miners, who receive them as rewards for mining blocks and approving transactions. Miners mainly operate on cash and sell coins almost daily.  Bitcoin's Puell Multiple (Source: Ben Lilly, lookintobitcoin.com) The latest reading may raise hopes for a bull market resumption. Lilly says it should be taken "with a grain of salt."
That's because the ratio's drop into the green zone follows a slide in the hash rate and the daily issuance caused by China's mining ban. It does not necessarily imply miner capitulation.
China reiterated its long-held crypto mining ban in mid-May and stepped up its efforts this month, ordering miners based in Sichuan and other mining hubs to shut down operations.
As a result, the hash rate, a measure of the computational power working to secure the bitcoin blockchain network, declined from 140 exahashes per second (EH/s) to a 14-month low of 94 EH/s.
With miners going offline, the 30-day average of the daily issuance – coins mined and supplied – has declined from more than 900 BTC to 760 BTC, according to Glassnode data. According to Lilly, the average daily issuance has nearly halved from 900 BTC. Meanwhile, the cryptocurrency has traded mainly in the range of $30,000 to $40,000 this month.
The data confirm the Puell Multiple has entered the buy zone mainly because of China-based miners going offline – a move that's like to be temporary as there is evidence of miners shifting bases to other countries like the U.S. and Kazakhstan.
"This is a one-off event, meaning most of this mining power will return, and before you know it, MORE than 900 coins per day will be mined since the hash rate will hit the network after the difficulty of each block decreases," Lilly noted.
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Technician's Take by Damanick Dantes, CMT Bitcoin Gathers Upside Momentum; Faces Resistance Near $40K Bitcoin (BTC) buyers remained active during Asia hours and defended initial support around $33,800. The next level of resistance is seen between $38,000-$40,000, which is near the top of a month-long range.
The $30,000 support level was re-tested over the weekend, marking a higher low from the June 22 shakeout around $29,000. Price remains elevated and could break above the 100-period moving average on the four-hour chart.
 Bitcoin four-hour price chart shows short-term support and resistance levels (Source: TradingView)
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