The crypto market was cautiously optimistic on June 28th after Bitcoin (BTC) price rose rapidly above $ 35,500, raising hopes of an uptrend soon.

Despite the upside move, some analysts have warned that the failure to hit a daily close above the USD 35,000 resistance is a sign that traders are simply closing positions on any breakout of the resistance, a sign that further declines are possible.

According to David Puell, online analyst and creator of the Puell Multiple, this indicator just gave the fifth Bitcoin buy signal in history.

$ BTC: Reports received that the strangest named indicator has just given the fifth buy-signal in BTC history.

Looks good, yes, but keep in mind that Puell Multiple also responds to hash rate and hash rate movements according to price, not the other way around.

– David Puell (@kenoshaking) June 28, 2021

Puell Multiple focuses on the supply side of the Bitcoin economy, primarily Bitcoin miners and their revenue, and studies market cycles from a mining revenue perspective.

It is calculated by dividing the daily issued value of BTC (in USD) by the 365-day moving average of the daily issued value.

As can be seen in the graph above, the indicator measures the time periods during which the daily value of Bitcoin issued reached historical lows indicated by a green box or high values ​​in history when the indicator climbs into the red box.

Previous cases where the Puell Multiple indicated a good buying opportunity were in mid-2018 when the BTC price fell below $ 4,000 in the middle of the crypto winter and again in March 2020 when the price fell due to the Covid-19 Pandemic collapsed.

It also gave traders a sell signal in late 2017 when BTC price topped the highs of this cycle, as well as during the 2013 Bitcoin bull market.

The purge of miners results in a historic decline in mineral extraction

The recent bitcoin fighting has been exacerbated by the mining crackdown in China, which has resulted in many large mining operations being shut down and relocated to other countries. Analysts now anticipate the biggest decline in mining troubles ever as hashrate drops from historic highs.

While miners are often seen as forced sellers because they have to cover the fixed costs associated with running the mining operation, the recent sale was followed by a 50% discount on the same cost in Fiat as well as the added cost of moving mines out of China .

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Cautious traders might focus on the fact that previous instances of sharp drops in hash rate were followed by falling prices, leading to reluctance to mobilize funds in current market conditions.

While BTC price saw some gains on June 28, Puell warned that many factors should be considered and that individual indicators should not be used in trading decisions.

Puell said:

“The hash rate depends on the price AND other exogenous factors, as we clearly saw with the situation in China.”