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Currently flashing red, a commonly used Bitcoin valuation indicator indicates that Bitcoin hasn’t been this underpriced since the demise of the bitcoin exchange FTX at the end of 2022.
Mayer Multiple Indices Purchasing Potential
Referring to the Bitcoin Mayer Multiple graphic, crypto education portal On-Chain College said in an Aug. 7 X post, “If you believe the Bitcoin price will be higher in 6-12 months, then this is objectively a fantastic time to buy.”
The indicator uses the resultant ratio as a buy or sell signal by comparing the current price of Bitcoin to its 200-day moving average. Trace Mayer, its author, has regarded a reading below 2.4 “buy” range.
Glassnode claims that when Bitcoin dropped to $49,751 on Aug. 5, the Mayer Multiple was 0.88. Based on Bitcoin analytics company BitBo data, the indicator has climbed, albeit only slightly, to 0.93 after the recent rally of Bitcoin.
Experts Warn Against Undervaluation
Given the Mayer Multiple has historically been “higher 70%,” analysts believe this indicates the asset is still cheap.
Other crypto specialists advise Bitcoin buyers to wait for now in case there are further near-term declines, notwithstanding the statistic.
“To ideally time the next bull market entry, we aim for Bitcoin prices to fall into the low 40,000s” said head of research Markus Thielen of 10x Research on Aug. 6.
Popular cryptocurrency trading account “wallstreetbets,” meanwhile, highlighted the recent decline in Bitcoin’s price, restating in an Aug. 6 post that “everyone gets Bitcoin at the price they deserve.”
“We might see a retest of the long-term trendline support before higher, should the $60,000 support be lost on a closing basis,” pseudonymous crypto trader Mags said.
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