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So far in this series we have looked at valuation through the MVRV Z-Score and market sentiment through NUPL. Today we turn to miner behaviour, and specifically a metric called the Puell Multiple.
To understand why miners matter, it helps to understand their position in the market. Miners are often referred to as compulsory sellers. Unlike most Bitcoin holders who can choose when to sell, miners operate with fixed costs: energy, hardware, staff. Those bills do not stop when the price drops. As a result, miners must sell a portion of their Bitcoin consistently to cover expenses, which means their revenue relative to historical norms has a direct influence on market dynamics.
The Puell Multiple measures this by dividing the daily USD value of newly issued Bitcoin by the 365-day moving average of that same figure. The result is a ratio that tells you whether miners are currently generating revenue that is unusually high or unusually low relative to the past year.
When the multiple is high, miner revenue is elevated well above the annual average. Historically that has coincided with Bitcoin price peaks, the periods where the market is overheated and supply pressure from miners is at its greatest. When the multiple is deep in the green zone, miner revenue has collapsed relative to the historical norm. Miners are operating under severe stress, many are running at a loss, and the weakest are being forced to shut down entirely. That environment has, in every prior cycle, marked the conditions from which Bitcoin has launched its next major recovery.
