The Mayer Multiple, used for assessing Bitcoin, is currently below its historical average. This occurrence may signal possible undervaluation of the asset.
What is Mayer Multiple?
The Mayer Multiple is a tool used by Bitcoin investors to determine whether the asset is overvalued or undervalued. It is calculated by dividing the current price of Bitcoin by its 200-day moving average (200DMA). A high Mayer Multiple suggests Bitcoin may be overbought, while a low number implies possible undervaluation.
Why Does It Matter for Investors?
When the Mayer Multiple dips below its average, it often reflects a market in a phase of correction or consolidation. While this may seem negative at first glance, historical data suggests otherwise. Buying Bitcoin when the Mayer Multiple is below average has frequently led to strong future returns. This doesn’t guarantee immediate price increases, but it can be a valuable long-term signal.
What Comes Next for Bitcoin?
While sentiment may be mixed, the current level of the Mayer Multiple suggests Bitcoin is in a neutral-to-bullish zone. With more than half of Bitcoin’s historical price movement sitting above today’s multiple, there’s a strong argument that the cryptocurrency is relatively undervalued. Those paying attention to long-term indicators may want to reassess their strategies.
Despite current market fluctuations, the Mayer Multiple level may indicate favorable conditions for long-term investors. Combining such metrics with broader market analysis can be key to successful investment decisions.
