A little known indicator suggests that Bitcoin (BTC) is still undervalued, despite being at the top of an important market structure.

This is the Puelle Multiple (PM), which tracks Bitcoin over time from a mining revenue perspective, and has been shown to be an accurate forecaster of price movements.

Simply, the PM works by dividing the USD price of a given day’s block reward by a 365-day average of the USD price of block rewards.

If this ratio is low, the metric indicates a moment of significant opportunity for Bitcoin miners in the following months.

Puelle Multiple over time(source: Medium.com)

This indicator makes sense because Bitcoin mining—by now an industrial operation—is not a day-to-day affair. Most miners buy blocks of electricity in contracts for many months at a time, forcing them to take a long view of profitability.

What this means is that miners should be reluctant to sell their Bitcoin at this time, as it will be more profitable to do so in the future. This removes important sell pressure from the market.

It just so happens that PM is now very low, bottomed out in fact.

The indicator hit a level of 0.4 on May 17, and historically it never gets much below this level.

Lookin' good(source: Bitcoinvisuals.com)

This is an important moment for Bitcoin, and the PM flashing buy is adding to the drama.

Not only is Bitcoin crossing in a ‘Golden Cross’ (covered here), but it is also on the verge of a monster breakout—if only it can gather the strength for it.

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