Recent declines in the Bitcoin Mayer Multiple have resulted in a drop of 5% from the low point during the previous cycle. It is the first such trend in the history the metric has ever seen.
Current Bitcoin Cycle’s Mayer Multiple Low Is Deeper Than Last Cycle’s
Glassnode has released data that shows the BTC Mayer Multiple current value at 0.478, according to the firm’s analytics.
Before seeing what the Bitcoin Mayer Multiple does, it’s best to look at a basic explanation of a “moving average” first.
An analytical tool called a moving average, or MA for short, that calculates the average value over time is known as a moving average.
The MA moves with the quantity and alters its value according to its name. You can take an MA over any period of time. This includes 100 days, 72 hour, or 10 second.
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Because they remove any short-term fluctuations, larger MAs are often more useful for longer-term analysis.
The 200-day MA is a popular Bitcoin moving average. It has been used historically to indicate a bear or bull market when the price falls below that level, as well as a bull market when the price crosses over it.
What the Mayer Multiple actually does is to measure the deviation in price from the MA of 200 days.
Below is a chart that shows how Bitcoin has changed over time.
Source: Glassnode| Source: Glassnode
The graph shows the Bitcoin 200-day MA as a blue line and where the Mayer Multiple value would be 0.5.
The chart shows that the cryptocurrency price has fallen below the 0.5 Mayer Multiple Line only a handful of times.
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In reality, of all the 4163 cryptocurrency trading days, only 87 were spent below the green limit, or about 2%.
One pattern the Mayer Multiple used before the current cycle was the observation that each subsequent cycle had lower bottoms than its previous.
In the cycle so far, the metric has already dipped to 0.478, which is less than last cycle’s bottom of about 0.511. This is the first time that Bitcoin has seen this happen in its history.
BTC Prices
At the time of writing, Bitcoin’s price floats around $21.2k, up 3% in the past week.
The crypto market has seen a significant decline in value recently. Source: TradingView's BTCUSD.| Source: BTCUSD on TradingView
Maxim Hopman featured image on Unsplash.com. Charts from TradingView.com and Glassnode.com.