Puell Multiple: A Supply‑Side Lens on Bitcoin
Overview
The Puell Multiple is one of the few crypto‑native indicators rooted directly in Bitcoin’s supply-side mechanics, rather than investor sentiment or derivatives structure. It evaluates the economic pressure on miners—the only structurally compelled sellers in the Bitcoin ecosystem.
Because miners must regularly sell BTC to cover operating costs, their revenue cycles create predictable behavioral patterns. When miner revenue is extremely low, weak miners capitulate and supply pressure collapses. When revenue is extremely high, miners historically sell aggressively and contribute to local or cyclical tops. The Puell Multiple captures these cycles with surprising clarity.
What the Puell Multiple Measures
Formula:
Puell Multiple = (Daily BTC Issuance Value in USD)
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(365‑day moving average of issuance value)
This measures how “expensive” or “cheap” miner revenue is relative to its 1‑year baseline—effectively a Z‑score for miner economics.
Interpreting the Zones
🟩 Low Puell (Green Zone)
Indicates miner stress and potential capitulation.
Characteristics:
- Miners become unprofitable
- Inefficient miners shut off hardware
- Hash rate dips
- Difficulty adjusts downward
- Selling pressure collapses
These conditions often form long‑term generational bottoms. Once weak miners exit, the remaining miners face less competition and stronger margins, setting the stage for Bitcoin’s next expansion phase.
🟥 High Puell (Red Zone)
Indicates miner overperformance and elevated revenue.
Characteristics:
- Miners earn significantly above baseline
- They are structurally incentivized to sell more BTC
- These periods historically align with major macro tops
Past cycle highs (2013, 2017, 2021) coincided with Puell entering or exceeding this red band.
Why This Indicator Matters
Miner behavior directly impacts Bitcoin’s supply elasticity:
- Low Puell → Elastic Supply (supply pressure softens, bottoms form)
- High Puell → Brittle Supply (forced selling increases, tops become vulnerable)
This structure complements a derivatives‑driven view of the market. Unlike funding rates or open interest, which reflect trader positioning, the Puell Multiple reflects structural supply dynamics.
Connection to Broader Market Frameworks
1. Supply Elasticity & Open Interest Regimes
- Low Puell → supply becomes elastic → shocks are absorbed more easily
- High Puell → supply becomes brittle → small shocks cause outsized drops
This aligns with leverage elasticity models used to interpret:
- OI contractions without displacement (elastic)
- OI contractions with heavy displacement (brittle)
2. Liquidity Regime Interactions
Puell lows frequently overlap with macro periods of:
- suppressed global liquidity
- strong USD
- miner stress phases
Reversals occur as liquidity inflects upward.
3. Funding & Derivatives Structure
Low Puell zones often correspond with:
- suppressed long participation
- high short bias
- low leverage buildup
- volatility compression
These setups frequently precede asymmetric upside squeezes.
Current Read (Based on Chart Image)
The Puell Multiple appears to be in neutral territory:
- No significant miner capitulation pressure
- No euphoric over‑extension
- Market behavior currently dominated by demand-side flows and derivatives structure, not miner behavior
This is consistent with:
- large‑scale short‑side imbalances
- brittle high‑range open interest
- liquidity maps showing asymmetry
- cross‑asset structural divergences (e.g., SOL/BTC)
Summary
The Puell Multiple provides a clean, supply‑side understanding of where Bitcoin sits within its miner‑driven revenue cycles. It highlights when miners are a stabilizing force (capitulation) versus when they are a destabilizing force (excessive selling).
Even as modern crypto markets are increasingly shaped by derivatives, leverage, and macro liquidity, supply‑side stress remains a foundational structural pillar—and the Puell Multiple remains one of the most reliable ways to measure it.