Bitcoin bounces off the historic “Mayer Multiple” bottom zone
Data shows that the price of Bitcoin has broken above the 0.55 Mayer Multiple level, below which the crypto has historically formed bottoms.
Bitcoin has now left the zone below the 0.55 Mayer Multiple
According to the latest weekly report from Glassnode, the BTC price has escaped above the Mayer Multiple bottom zone.
“Mayer Multiple” is an indicator that measures the relationship between the current Bitcoin price and the 200-day moving average of the same.
A “moving average” (or MA for short) is an analytical tool that takes the average of any quantity over a specified period of time and, as the name implies, moves with the quantity and changes its value accordingly.
MAs are quite useful for studying long-term trends as they eliminate short-term fluctuations and smooth the curve.
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The Mayer Multiple basically tells us how the latest value of the crypto has deviated from its average over the last 200 days. Based on this, it becomes possible to say whether the coin is currently overbought or oversold.
Now, here is a chart showing the trend of the Bitcoin “Mayer Multiple = 0.55” line over the last few years:
Looks like the price of the coin has crossed above the level recently | Source: Glassnode's The Week Onchain - Week 30, 2022
As you can see in the graph above, the price of Bitcoin was below a Mayer Multiple value of 0.55 until recently.
At this value of the indicator, the BTC price is trading 45% lower than the 200-day average. Historically, cyclical bottoms in the cryptocurrency have formed below this level.
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This zone of Mayer Multiple values less than 0.55 has rarely been observed, with the crypto closing below it on a total of 127 days out of the 4,186 days of trading life of the coin. This means that BTC has only spent 3% of its history in this region.
At the moment, it seems that Bitcoin is now shooting above the level after spending some time below it recently. If the past is anything to go by, this could mean a bottom is now in for crypto as the worst of the bear market may be over.
BTC price
At the time of writing, Bitcoin’s price is hovering around $20.9k, down 5% in the last seven days. Over the past month, the crypto has lost 2% in value.
The chart below shows the trend in the price of the coin over the last five days.
The value of the crypto seems to have been going down over the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com
