Jun 27, 2024 at 11:47Contents
The Bitcoin price is increasingly low compared to its 200-day moving average, signaling a potential “buy the dip” opportunity according to a classic BTC price indicator.
Key Points
– Healthy Reset to Bullish Sentiment:** Bitcoin’s Mayer Multiple, a key BTC price indicator, has reached its lowest point in eight months, delivering a “healthy reset” to bullish sentiment.
– Bearish Market Mood:** Despite Bitcoin trading at $60,000, the market remains bearish after a 17% price drop. The Crypto Fear & Greed Index is hitting 2024 lows, reflecting pessimism among holders.
Classic Patterns and Mayer Multiple
On June 27, analyst On-Chain College noted on X (formerly Twitter) that the Bitcoin Mayer Multiple is following classic patterns. This indicator, which measures Bitcoin’s price against its 200-day moving average (200DMA), suggests a potential recovery. Historically, a reading below 2.4 is considered a “buy” signal.
Current Mayer Multiple Data
Data from on-chain analytics firm Glassnode showed that as of June 26, the Mayer Multiple was at 1.05. For the Multiple to hit 2.4, Bitcoin’s price would need to approach $140,000—a level last seen in March 2021.
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“The Bitcoin Mayer Multiple is now at a level not seen since October 2023, despite price at $60.9K now vs. $29.9K back in October,” On-Chain College stated, noting a “healthy reset of sentiment to shift back bearish while being at twice the price.”
Historical Context and Price Floors
Extreme lows in the Mayer Multiple don’t always align with BTC price bottoms. For instance, in mid-2022, the indicator hit around 0.47, but it took another four months for the price to find its floor.
Additional Buy Signals
The Mayer Multiple isn’t the only “buy” signal in play. Bitcoin’s relative strength index (RSI) has also entered “oversold” territory across various timeframes. The daily RSI was last at current levels in August 2023, a period marked by consolidation just below key resistance at $30K.
Trader Jelle highlighted this in a recent X post, stating, “The last time the RSI was this low, Bitcoin had just consolidated for 3+ months, just below the key resistance @ 30k. We’re looking at 3+ months of consolidation below 70k now. History repeating?”
At the time of writing, BTC/USD was trading around $60,700 according to data from Cointelegraph Markets Pro and TradingView.
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