Bitcoin Is Trading 40% Beneath Its 200-Day MA — What’s Next?

Recent on-chain data shows that the Bitcoin price is currently at an important phase, raising suspicions as to whether the market is nearing a cyclical bottom.

Mayer Multiple Falls To 0.6 — What This Means

In a recent Quicktake post on the CryptoQuant platform, on-chain analyst Ruga Research pointed out that the Bitcoin price now has a 40% negative deviation from its 200-day moving average. This on-chain observation revolves around the Bitcoin Mayer Multiple.

For context, the Mayer Multiple metric tracks how far a coins current price is trading above or below its long-term trend. This indicator is able to achieve this by dividing the price by its 200-day moving average.

When the metric shows a reading of 1, it typically means that the Bitcoin price is trading approximately at the 200-day MA. Meanwhile, readings above 1 reflect that the Bitcoin price is at a premium relative to its long-term trend, while readings below 1 suggest that the price is trading at a discount.

Historically, the metric has several thresholds in tandem with market conditions. For example, when the metric reaches levels above 2.4, it often signals that the Bitcoin price is at an overbought zone (also known as the bubble territory).

As explained earlier, 1 – 1.5 represents the normal bull-market range, while 0.8 – 1.0 is typically the discount zone (where accumulation often occurs). Notably, when the price falls to regions below 0.8, it signals that the Bitcoin price has been oversold, as a result of capitulation events.