One quant has shown that the Mayer Multiple can show Bitcoin at $103,000 is still underheated when compared to previous trends.
Bitcoin Mayer Z-Score is still below its Mean
The aforementioned is a post Quant Frank discussed the current state of Bitcoin’s Mayer Multiple on X. The “Mayer Multiple”This is an indicator which keeps track of a ratio between BTC’s current spot price, and the BTC’s future value. 200-day moving average (MA). In other words, the metric represents the distance that the asset’s value has from the 200-day MA.
The 200-day MA is a level that’s generally considered as an important boundary between macro bullish and bearish trends in the cryptocurrency, so it can be useful to know how far the coin is from this line.
In the context of the current discussion, the Mayer Multiple itself isn’t of interest, but rather its Z-Score. Mayer Multiple Z-Score measures the amount of deviation an indicator shows from its median value.
The chart below shows the data shared by an analyst.
In the graph above, you can see that the Bitcoin price fell below the 200-day MA in an earlier downturn. However, with this latest run of recovery, it is now back over the line. It would seem, though, that the asset hasn’t gained too much distance over the level so far, at least in historical context.
This is confirmed by the Mayer Multiple Z-Score graph (bottom), whose value currently falls below zero. The Mayer Multiple’s all-time average is represented by the zero level. In this case, the negative values like those currently in use suggest that the metric has been below average throughout history.
In 53% of the days, the ratio was higher than its current level. The quant concludes that Bitcoin is still relatively hot even with its current price of $103,000.
From the chart, it’s visible that while the Z-Score is still negative, it’s much improved compared to the lows from earlier in the year. It’s possible that if BTC continues its bullish momentum, it will be challenging the zero level soon.
The Z-Score has risen above the standard deviation level of 1 on several occasions in this cycle.
So far, though, the Bitcoin Mayer Multiple hasn’t deviated to the same degree as during the bull run The first half of 2020. Now it remains to be determined whether or not the indicator will reach similar levels during this cycle.
BTC price
Bitcoin’s price is currently around $102,700. This represents a 1.5% decline over the past seven days.
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Source: www.newsbtc.com
