Bitcoin Valuation Alert: Mayer Multiple Signals Undervaluation

Bitcoin Valuation Alert: Mayer Multiple Reaches 0.88

Bitcoin Valuation Alert – A prominent Bitcoin valuation indicator is flashing red, indicating that Bitcoin is currently undervalued at levels not seen since the collapse of the cryptocurrency exchange FTX in late 2022. The Mayer Multiple, a tool that compares Bitcoin’s current price to its 200-day moving average, is signaling a potential buying opportunity.

Current Mayer Multiple Reading

On August 5, 2024, the Mayer Multiple dropped to a value of 0.88 when Bitcoin’s price fell to $49,751. This metric has slightly increased to 0.93 following Bitcoin’s rebound, according to data from Bitcoin analytics firm BitBo. The Mayer Multiple is used to determine buy or sell signals, with values below 2.4 considered to be in the “buy” territory by its creator, Trace Mayer.

Historical Context and Analysis

Historically, the Mayer Multiple has been higher 70% of the time since Bitcoin’s inception, suggesting that the asset is currently undervalued. Despite this, some analysts recommend caution. Markus Thielen, head of research at 10x Research, advised on August 6, 2024, that to optimize timing for the next bull market entry, Bitcoin prices should ideally fall into the low $40,000s before a significant rally attempt.

Market Sentiment and Future Outlook

On August 6, the popular crypto trading account “wallstreetbets” highlighted the recent price dip, stating, “Everyone gets Bitcoin at the price they deserve.” Pseudonymous trader Mags added that if Bitcoin fails to hold the $60,000 support level on a closing basis, it might revisit the long-term trendline support before potentially moving higher.

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