Bitcoin (BTC) has initiated a “positive recalibration” of bullish sentiment by witnessing a significant drop in a key BTC price indicator to levels not seen in eight months.
In a recent message on X (previously known as Twitter) on June 27, renowned analyst On-Chain University noted the occurrence of familiar patterns in the Bitcoin Mayer Multiple.
The Mayer Multiple has touched its lowest point since October 2023, with Bitcoin still holding steady at $60,000 despite a noticeable 17% decline reflecting a prevailing bearish sentiment.
As highlighted by Cointelegraph, the Crypto Fear & Greed Index is presently hovering near 2024 lows, and there is a lack of optimism among the average hodler on social platforms regarding an imminent price reversal.
Nonetheless, the Mayer Multiple could be hinting at a potential recovery in the offing. This metric gauges Bitcoin’s present price in comparison to its 200-day moving average, with the resulting ratio serving as a signal to buy or sell. Its creator, Trace Mayer, originally identified a reading below 2.4 as the “purchase” region.
Data from Glassnode, an on-chain analytics company, reveals that as of June 26, the Mayer Multiple stood at 1.05. For the Mayer Multiple to reach the 2.4 threshold, the price would have to soar close to $140,000. The last time BTC/USD registered a 2.4 reading was back in March 2021.
On-Chain University’s accompanying commentary stated, “The Bitcoin Mayer Multiple has now revisited levels last seen in October 2023, despite the price being at $60.9K currently, compared to $29.9K in October.”
Although extreme lows in the Mayer Multiple do not always align with Bitcoin price bottoms, history has shown that there might be a delay before price floors materialize following such instances.
In ongoing discussions throughout June, the stability of Bitcoin’s price has drawn considerable attention, with the Mayer Multiple not standing alone as a current “buy” signal.
Furthermore, Bitcoin’s relative strength index (RSI) has dipped into the “oversold” category across various timeframes. Looking at the daily chart, the RSI’s current levels were last observed in August 2023, a period during which crucial bull market support trendlines like the short-term holder cost basis were similarly being breached.
Jelle, a well-known trader, suggested in his recent X discourse on the subject, “The last instance of the RSI being this low coincided with Bitcoin consolidating just below the crucial resistance level of 30k for over three months.”
As of the time of drafting this article, BTC/USD was trading around $60,700, according to data from Cointelegraph Markets Pro and TradingView.
This article does not offer any investment advice or recommendations. All investment and trading decisions entail risk, and readers are advised to perform their own due diligence before making any financial decisions.