Mayer Multiple: A Fresh Perspective on Bitcoin‘s Potential
The Bitcoin market continues its relentless march, and amidst the excitement, on-chain metrics offer crucial insights. One such indicator, the Mayer Multiple, is currently painting a compelling picture, suggesting that Bitcoin (BTC) has considerable room to grow before reaching a point of overvaluation. This contrasts sharply with the narratives of a potential blow-off top that often dominate the headlines during bull market phases.
Understanding the Mayer Multiple
The Mayer Multiple is a straightforward yet insightful tool. It calculates the ratio between Bitcoin‘s current price and its 200-day moving average. Readings above 2.4 historically signal ‘overbought‘ conditions, while levels near 0.8 can indicate ‘oversold‘ territory. Currently, the multiple hovers around 1.16, which implies that Bitcoin is closer to being undervalued, even at its record-breaking price levels.
$180,000 Bitcoin? The Math Behind the Hype
According to the Mayer Multiple, Bitcoin could potentially reach $180,000 before triggering an overbought signal. This is calculated based on the current ratio and the 200-day moving average. The implication here is substantial: The current bull run may have significant runway left, suggesting that earlier estimations could be a floor, not a ceiling. This underscores the importance of understanding the underlying data.
On-Chain Data and Market Sentiment
Popular crypto analyst Frank A. Fetter, echoed a similar sentiment, noting that the Mayer Multiple is “ice cold” despite Bitcoin‘s all-time highs. This sentiment highlights the divergence between market sentiment and on-chain data, where the underlying metrics tell a different story, suggesting a continuation of the bull run.
A Different Bull Cycle?
Interestingly, this bull cycle has seen a more subdued Mayer Multiple compared to previous cycles. The indicator reached a maximum of 1.84 in March 2024, while the price was around $72,000. This suggests a less frenzied market, potentially indicating a more sustainable growth trajectory for Bitcoin.
Breakout Timing and Market Uncertainty
While the Mayer Multiple provides a bullish outlook, the timing of Bitcoin‘s next significant price move remains a point of debate. Several analysts, like Axel Adler Jr., emphasize the potential for upward movement. However, short-term price volatility is expected, and a 10% dip is still a possibility.
Disclaimer
This analysis is based on on-chain data and market trends and should not be taken as financial advice. Investment decisions should always be based on personal research and risk tolerance.
