The second reason is that (Mayer Multiple) MM is a pretty simple, yet powerful indicator. The MM formula is defined as “the multiple of the current bitcoin price over the 200-day moving average.” As simple as that!
But why is it interesting? When the market goes up, it’s bullish. When it goes up too fast, it’s a bubble. When he goes down – it’s bearish. When he goes down too fast – this is a bottom. The important number is 2.4 that’s based on historical data. When the MM is above 2.4, it means that bitcoin is in the speculative bubble. When Mayer Multiple is 1, it means that the current bitcoin price is exactly the 200-day moving average.
The most interesting part is the historical values. The average Mayer Multiple since the creation of Bitcoin is 1.39. It means that the average bitcoin market trend was bullish. The current value is 0.76 though.
If you decide to use this indicator, don’t forget that it gives the historical data only and can’t be used in any way for the price predictions.