Bitcoin's Bull Run Has Plenty of Steam Left

Key indicators tracking Bitcoin's blockchain activity, miner flows, and the 200-day moving average suggest bitcoin is far from being overvalued and could continue to rally in 2024.

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• Cognitive biases like anchoring may see investors anticipate a BTC price slide in the wake of this year’s 150% rally.
• Indicators like Puell Multiple, MVRV Z-Score, and Mayer Multiple suggest bitcoin is far from being overvalued and could continue to rally in 2024.

Bitcoin (BTC), the leading cryptocurrency by market value, has surged over 150% this year, beating traditional assets like the S&P 500, gold, and the U.S. dollar by a huge margin.
That may have some investors, particularly those who haven’t seen the previous crypto bull runs and are “anchored” to the brutal bear market of 2022, intuitively view the cryptocurrency as being overvalued and anticipate a price slide in the coming months. Anchoring is a cognitive bias that causes investors to rely overly on recent or initial data while making future judgments.
Traditional finance investors who want exposure to bitcoin could fall victim to the anchoring bias and intuitively wait for cheaper entry prices. That’s because, in conventional markets, assets rarely double in value in less than a year. Besides, investors, in general, are vulnerable to loss aversion, a cognitive behavior of booking out of winning trades early and holding on to loss-making bets for longer.
Believing in the aforementioned conitive biases, however, could prove costly as three indicators – tracking activity on the Bitcoin blockchain, miner flows, and the 200-day moving average – suggest the cryptocurrency has plenty of upside left.
Let’s discuss these indicators in detail.
Puell Multiple
The Puell Multiple measures the U.S. dollar value of the daily bitcoin issued relative to the 365-day moving average of the dollar value of the issuance. The issuance here refers to the current supply, i.e., minted or new coins released to the network. Since the last halving in early 2020, miners have minted roughly 900 tokens per day.
Elevated readings indicate that the present profitability of miners is high compared to the yearly average, and hence, they could liquidate their holdings at a faster pace, adding to bearish pressures in the market. Low readings suggest otherwise.
In the past, readings above four have coincided with market peaks, with values reaching as high as 10 in early bull cycles. Meanwhile, multiples of less than 0.5 have hinted at market bottoms.
As of the time of writing, the Puell Multiple stood at 1.53, well short of the red zone above four, according to data tracked by Glassnode.