Bitcoin (BTC) provided a “healthy reset” to bullish sentiment as the major BTC price indicator hit an eight-month low.
Popular analyst On-Chain College said in a post on X (formerly Twitter) on June 27 that a classic pattern is repeating itself in the Bitcoin Mayer Multiple.
The Mayer Multiple is at its lowest level since October 2023.
Bitcoin is still hovering around $60,000, but it has been showing a noticeable decline recently, down 17%.
As Cointelegraph reports, cryptocurrency fear and greed indices are challenging 2024 lows and there are few signs across social media that the average holder is expecting a price reversal.
However, the Myer multiple suggests a recovery could come soon.
This indicator measures Bitcoin’s current price compared to its 200-day moving average, and the resulting ratio is used as a buy or sell signal. Founder Trace Mayer originally suggested a number below 2.4 as “buy” territory.
As of June 26, the Mayer Multiple was measured at 1.05, according to data from on-chain analytics firm Glassnode.
Conversely, for the Mayer Multiple to reach the 2.4 level, the price would have to be close to $140,000. BTC/USD last hit the 2.4 figure in March 2021.
“Bitcoin Mayer Multiple is at levels not seen since October 2023, despite the current price of $60.9K vs. $29.9K in October,” On-Chain College wrote in part of the accompanying commentary.
“With prices doubling, it’s a healthy sentiment reset that could reverse the weakness.”
The extreme lows of the Mayer Multiple do not always coincide with the BTC price floor. In mid-2022, the indicator bottomed out around 0.47, but it took four more months for prices to mark the bear market pit.
Bitcoin Overbought Trader: “Is History Repeating itself?”
As Cointelegraph continues to report, price strength is a popular topic of debate in June, as the Mayer Multiple is not the only “buy” signal currently in effect.
Related: Bitcoin price teeters at $61,000 as US government sends 4K BTC to Coinbase.
Bitcoin’s Relative Strength Index (RSI) has also fallen into “oversold” territory for several periods.
On the daily chart, RSI was previously at this week’s level in August 2023. This was at a time when other bull market support trend lines, such as the short-term holder cost basis, were being violated in a similar manner to what they are now.
“The last time RSI was this low, Bitcoin had been consolidating just below the key resistance level of 30,000 for more than three months.” Popular trader Jelle wrote in part of his latest X post on this topic.
“We are now seeing over 3 months of consolidation below 70k. Is history repeating itself?”
BTC/USD was trading around $60,700 at the time of writing, according to data from Cointelegraph Markets Pro and TradingView.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.