Puell Multiple is defined as the ratio of the daily value of the issued coin in USD divided by 365 days moving average of the daily value of issued coins in USD.
Puell Multiple can be interpreted as "If all mined bitcoins were sold immediately in the market, how profitable mining pools are compared to last historical one year?". This metric helps traders gauge the market cycles from the global view.
We set the upper threshold as 4 and the lower threshold as 0.5 (after logarithmized) for spotting market tops and bottoms. As you can see below, Puell Multiple locates its local tops or bottoms well to the market's local tops or bottoms.