Reading Bitcoin's Puell Multiple: Mining Revenue as a Market Signal

Bitcoin investors often struggle to distinguish between genuine market momentum and speculative euphoria. The puell multiple offers a data-driven solution by tapping into one of the most reliable supply-side metrics available: miner profitability. Created by analyst David Puell, this indicator shifts the focus from typical demand-based analysis to examine how sustainable current price levels are from the miners’ perspective. When miners are earning outsized profits, it often signals Bitcoin may be trading above fair value—and vice versa. This article explores how the puell multiple works, what it’s currently signaling, and why it matters for your investment strategy.

How Miners’ Profitability Reveals Market Cycles

To understand the puell multiple, you first need to appreciate why miner behavior matters. Bitcoin miners serve as the network’s supply source; they generate new BTC through block validation and must continuously sell a portion of their rewards to pay for electricity, hardware maintenance, and operational overhead. This creates an interesting dynamic: when Bitcoin price rises sharply, miners’ revenues spike, allowing them to cover costs more easily. But this abundance often coincides with market peaks, as unsustainable price levels eventually correct.

The puell multiple captures this by comparing daily miner revenue (measured in USD terms) against its 365-day moving average. The formula is straightforward:

Puell Multiple = Current Daily Miner Revenue ÷ 365-Day Average of Daily Miner Revenue

By tracking this ratio over time, the indicator identifies whether current miner earnings are exceptionally high, abnormally low, or within normal ranges. These extremes tend to align with Bitcoin’s market turning points.

Decoding the Zones: From Undervaluation to Overheating

The puell multiple operates through a color-coded zone system that investors can quickly interpret:

Red Zone Territory (Readings Above 3.4) When the puell multiple surges into red zone, it indicates miners are earning revenues dramatically above their yearly average. Historical data shows these periods consistently precede or coincide with Bitcoin price corrections. The elevated profitability becomes unsustainable as speculative demand cools, typically marking local or cyclical peaks.

Green Zone Territory (Readings Below 0.5) The opposite scenario occurs when the puell multiple drops into green zone, signaling miner revenues have collapsed below typical levels. These distressed conditions—where miners struggle to maintain operations—have historically coincided with market capitulation phases. From a contrarian perspective, green zone readings often represent prime accumulation windows for long-term buyers.

Neutral Range (Between 0.5 and 3.4) Most of Bitcoin’s trading history occurs within this band. When the puell multiple hovers in neutral territory, it suggests Bitcoin is trading near its sustainable fair value relative to mining economics. Price movement during these periods reflects fundamental shifts rather than speculative extremes.

Current Market Position and Investment Implications

As of early 2026, the puell multiple remains in mid-cycle territory—elevated compared to bottom phases but comfortably below overheated readings. The trajectory shows gradual upward movement, indicating miners are becoming increasingly profitable as Bitcoin price strengthens.

This positioning suggests the market is transitioning from early-cycle accumulation into a mainstream momentum phase. The absence of red zone readings indicates there’s likely still runway for price appreciation before overvaluation becomes a concern. However, investors should recognize that the puell multiple is a lagging indicator; sharp price spikes can occur before the metric signals overheating.

Looking ahead to Bitcoin’s 2028 halving event, miners will face a fundamental shift in reward structure. Supply reduction combined with current miner profitability trends could create an interesting dynamic—one worth monitoring closely on the puell multiple chart as the halving approaches.

Practical Application for Investors

The puell multiple functions best as part of a multi-indicator framework rather than a standalone signal. When combined with on-chain metrics, technical analysis, and macroeconomic context, it provides valuable perspective on whether current Bitcoin valuations make sense from mining economics. Use green zone readings as a potential entry signal for contrarian accumulation, reserve red zone warnings as caution flags for profit-taking, and treat neutral readings as periods requiring additional conviction signals for decision-making.

The key insight: the puell multiple asks whether Bitcoin’s current price level makes economic sense for the miners sustaining the network. When miners are excessively profitable, the market may be pricing in assumptions that won’t hold. When miners are squeezed, fear has likely overshot downside. By monitoring this supply-side metric, you gain insight into one of Bitcoin’s most reliable market cycle indicators.