Data shows 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 0.55 Mayer Multiple
As per the latest weekly report from Glassnode, the BTC price has escaped above the Mayer Multiple bottom zone.
The “Mayer Multiple” is an indicator that measures the ratio between the current Bitcoin price and the 200-day moving average of the same.
A “moving average” (or MA in brief) is an analytical tool that takes the average of any quantity over a specified period, and as its name implies, it moves with the quantity and changes its value accordingly.
MAs are quite useful in studying long-term trends as they eliminate any short-term fluctuations and smooth out the curve.
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The Mayer Multiple basically tells us how the latest value of the crypto has deviated from the average during the past 200 days. Based on this, it becomes possible to say whether the coin is currently overbought or oversold.
Now, here is a chart that shows the trend in the Bitcoin “Mayer Multiple = 0.55” line during the last several 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 above graph, the the price of Bitcoin was under a Mayer Multiple value of 0.55 until very recently.
At this value of the indicator, the BTC price is trading 45% lower than the 200-day average. Historically, cyclical bottoms in the crypto’s price have formed under this level.
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This zone with Mayer Multiple values less than 0.55 has been rarely observed, with the crypto closing under it on a total of 127 days out of the 4186 days of trading life for the coin. This means that BTC has only spent 3% of its history in this region.
Currently, it seems like 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 that a bottom is now in for the crypto as the worst of the bear market may be over.
At the time of writing, Bitcoin’s price floats around $20.9k, down 5% in the last seven days. Over the past month, the crypto has lost 2% in value.
The below chart 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
Image and article originally from www.newsbtc.com. Read the original article here.