The data shows that the bitcoin price broke above the 0.55 Mayer Multiple level, below which the cryptocurrency has historically formed bottoms.
Bitcoin has now left the region below the 0.55-myr multi
According to the latest weekly report from glassBTC price escaped above the Mayer Multiple bottom area.
The “Meyer multiple“It 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 for short) is an analytical tool that takes the average of any quantity during a specified period and, as its name suggests, moves with the quantity and changes its value accordingly.
MAs are very useful for studying long-term trends because they remove any short-term fluctuations and smooth the curve.
Mayer Multiple basically tells us how the latest cryptocurrency value has deviated from the average over the past 200 days. Based on this, it becomes possible to determine whether the currency is overbought or oversold.
Now, here is a chart showing the trend in the Bitcoin “Mayer Multiple = 0.55” line over the past 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 chart above, the price of Bitcoin was below Mayer Multiple’s value of 0.55 until very recently.
At this value of the index, the price of BTC is trading 45% below the 200-day average. Historically, periodic bottoms have formed in the price of the cryptocurrency below this level.
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This area is rarely observed with multiple values below 0.55 of Mayer, with the cryptocurrency closing below it in a total of 127 of the 4,186 day trading life of the coin. This means that BTC has spent only 3% of its history in this region.
At the moment, Bitcoin now appears to be shooting above the level after spending some time lower recently. If anything the past is going through, it could mean that there is now a bottom for cryptocurrencies where the worst of the bear market may be over.
At the time of writing this report, Bitcoin price It is floating around $20.9K, down 5% in the past seven days. Over the past month, the cryptocurrency has lost 2% of its value.
The chart below shows the currency price trend over the past 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