Happen[in]The Crypto Mayer takes a look at the Multiple (MM) and its components. This is done with the aim of determining whether the long-term bitcoin (BTC) bias is bullish or bearish.
200-day BTC moving average
The Meyer Multiple is a BTC on-chain indicator. It uses the ratio between BTC’s price and its 200-day moving average (MA) to determine the trend.
To determine the top of the cycle, the 2.4 multiplication of this MA (purple) is used. In contrast, the 0.8 multiplication (green) is used to determine the top of the circle.
So far, the price has moved above this MA during each cycle top. However, it sometimes does so just before the top, as it did in February last year (black circle). At the time, BTC only moved above $50,000. However, the actual top was closer to $60,000.
Conversely, BTC bottoms are not as accurately determined as tops. While BTC has actually moved below the 0.8x line in each bottom, it sometimes hovered below it for long periods of time before reaching the bottom. This was the case in 2018 (red circle) when the price hovered above and below the line several times.
mayor multiple
Afterwards, the actual Meyer multiple MM reading is plotted as a line (blue), with horizontal multiples of 0.8 (green) and 2.4 (red) serving as the lower and upper limits.
The relationship between MM and its 0.8 oscillator is similar to that of BTC price and its oscillator. Therefore, the market bottom coincides with a decrease of MM below its 0.8 oscillator.
This happened this month (black circle).
There are parallels between the current movement and July 2018 (black rectangle). In both cases, the MM remained well above its 0.8 multiplier for an extended period of time.
However, in 2018, the price of BTC finally broke down and hit its December 2018 lows. Therefore, if the MM fails to hold above the 0.8 oscillator, it could lead to another downside.
conclusion
To conclude, the MM reclaimed the 0.8 oscillator after initially falling below it. This has historically been a sign of a downtrend in the market.
However, if MM turns down again, it could mean that BTC is in a bear market instead.
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