The Puell Multiple, a crucial metric for Bitcoin market analysis, has recently reached resistance levels previously observed during pivotal years in Bitcoin's history, specifically in 2012, 2016, and 2019. This development marks a potentially critical juncture for Bitcoin amidst its current price volatility.

Understanding the Puell Multiple 

The Puell Multiple is an important metric in the cryptocurrency world. It is calculated by dividing the daily issuance value of Bitcoins (in USD) by the 365-day moving average of the daily issuance value. 

This indicator is often used to gauge the health and potential future movements of Bitcoin's price. When the Puell Multiple reaches higher values, it is typically seen as a sign of market overheating, often leading to a corrective phase. 

Conversely, lower values can indicate periods of undervaluation, suggesting potential buying opportunities.

Bitcoin's price dip 

Alongside the rising Puell Multiple, Bitcoin's price has recently dipped below the significant $42,000 threshold. 

On Tuesday, Bitcoin experienced a 3% price drop. This price movement aligns with an increase in long liquidations and a spike in sell pressure, especially among short-term holders.

This downturn is a result of increased sell pressure after a prolonged period of substantial gains, according to multiple analysts. 

According to the latest data from CoinGecko, Bitcoin is trading at $42,371.96, marking a modest 1.1% increase. 

The digital currency has experienced a notable fluctuation in its 24-hour trading range, oscillating between $41,820.13 and $42,849.91. 

Bitcoin's market capitalization stands at a substantial $829.73 billion, but it is still far from its all-time peak.