Bitcoin’s ‘Puell Multiple’ Flashes Misleading Bullish Signal

PLUS: BTC price resistance now up to $40K

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     Bitcoin (BTC) +4.3%  $35,664 Ether (ETH)  +9.2%  $2,175 (Price data as of June 29 @11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.  Good morning. Here's what we're writing about: Market Moves: Bitcoin's 'Puell Multiple' Flashes Misleading Bullish Signal as China Bans Mining Technician's Take: Bitcoin Gathers Upside Momentum; Faces Resistance Near $40K Check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Lawrence Lewitinn and Emily Parker at 9:00 a.m. U.S. Eastern time. Today the show will feature guests: Kris Marszalek, Crypto.com Co-Founder & CEO Pankaj Balani, Delta Exchange Co-Founder & CEO  Yaniv Tal, Edge & Node CEO Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:   Gainers: Aave (AAVE): +20.7% Bitcoin Cash (BCH): +13.9% EOS (EOS): +12.1% The Graph (GRT): +11.6%   Losers: None of the assets in the CoinDesk 20 is down today.    The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges. 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.     Read the original story here: Bitcoin's 'Puell Multiple' Flashes Misleading Bullish Signal as China Bans Mining A message from Nexo Your digital assets deserve a savings account in their BEST INTEREST. 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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) Bitcoin is attempting to reverse a short-term downtrend, which could yield further upside, especially since the relative strength index (RSI) on the daily chart is not yet overbought. The corrective phase since May appears to be slowing as buyers return at support levels. A temporary relief rally could stabilize selling pressure until overbought signals appear on the charts. For now, bitcoin is stuck in a range as sellers maintain a series of lower price highs since April. Read the original story here: Bitcoin Gathers Upside Momentum; Faces Resistance Near $40K A message from Oasis Foundation   Get up to $50K to build your Oasis DApp Build a scalable, private DApp with Oasis, the leading privacy-first Blockchain, with built-in features to support confidential smart contracts. Check out the $1.5M USD Oasis Grants Program and get up to  $50K USD in ROSE token to build your project. APPLY NOW BOLO Be on the look out for some of these upcoming events:   14:00 UTC (10:00 a.m. ET): Consumer confidence index (May). Est: 118.7 The cryptocurrency movement has never been so sprawling, reaching every corner of the planet. Crypto State by CoinDesk aims to connect with local communities to explore this movement of financial disruption and how it trickles down to every corner of the globe, from DeFi investment opportunities to alternative ways to transact and store wealth. 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At its core, the code change is designed to make transaction fees on Ethereum less volatile and more predictable.  At the same time, EIP 1559 also poses several risks to Ethereum including risks of miner capitulation or revolt, technological risk in the form of unexpected bugs, and risk of user disappointment. In this report, CoinDesk Research gives an overview of how EIP 1559 works and its intended impact for investors, miners and users. Download the full report today. Latest Headlines Morgan Stanley Buys Over 28,000 Shares of Grayscale Bitcoin Trust The banking giant has been increasingly active in the cryptocurrency space to meet increased demand from its clients. Korea's First Bank Joins Messaging Giant Kakao's Blockchain Governance Council Shinhan joins a number of existing council members including LG Electronics, Binance, and Worldpay, among others. 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