Bitcoin has accustomed us to sudden, and significant, drops in value forever. Once again, this one was no exception to the rule and experiencing a significant bearish episode. Currently, the world’s leading cryptocurrency, by market capitalization, is trading around $20,500. While the social dominance around the token remains mixed, something else is teasing the experts.
The bear market that Bitcoin is currently experiencing, does not seem to correspond completely to the previous ones. In the report of a Glassnode analyst on October 31, we can find a comparison between the decline of Bitcoin this year with the previous ones. Find out what’s being said by reading on.
The Bitcoin bear market: only the tip of the visible iceberg?
What if the decline that has affected Bitcoin for the past few months was not hiding something even bigger from us? Glassnode’s report on this, “Hammering Out The Bottom“, seems particularly pessimistic. Despite an encouraging recovery above the symbolic threshold of $20,000 and even reaching $21,000, the BTC token suffered, once again, a cruel double rejection from the market. Moreover, if we look at a graph showing this phenomenon, it is very clear.
Bitcoin price chart over the past month expressed in dollars – Source: CoinMarketCap
The graph couldn’t be more explicit. The two sudden rises in BTC over the past few days saw their value drop almost immediately afterward as quickly as they climbed back up. This trend reflects a strong rejection of a new bull run of crypto. As of today, Bitcoin is 70% below its all-time high set at around $67,500. This directly impacts investors in a holding position who see their portfolio in loss.
The Mayer multiple as a harbinger of trouble
The Mayer multiple is a financial tool that is represented by a curve that can go from 0 to infinity. Here, it is made up of the price of Bitcoin and its 200-day moving average (MA 200) which calculates the average prices. We then divide the price by the value of the moving average to obtain the Mayer multiple. The thing to remember is that if the value is below 0.6, it is an oversold state. A value between 0.6 and 1 corresponds to the moment when it is necessary to accumulate in a reasonable way. Between 1 and 2.4, it is a bull run period. Above 2.4 is usually the time to sell according to the indicator.
Note that this indicator worked very well during the years 2014-2015 and also in 2018-2019. And at the moment, this one is below the 0.6, which means that Bitcoin is in an oversold position and we are supposed to buy some. However, the Glassnode report shows us that this “financial stress” continued even during the upswings that have taken place in recent days. And this phenomenon has been uninterrupted for nearly 3.5 months now. One could therefore conclude that Bitcoin does not seem to be done with its price decline. If the trend does not reverse, there is little chance of hoping for a new bull run.
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The Hopeful Monthly MACD Indicator for Bitcoin
There is, however, one indicator that seems to be giving us encouraging signs for the future of BTC. The monthly MACD indicator (moving average convergence divergence) measures the distance and the approach of the moving averages. And to make it simple, it makes it possible to spot reversals in the trend of a crypto-asset. And it is the recognized “Dave the wave” who will have expressed it through a rather optimistic tweet about Bitcoin.
And there you have it ladies and gentlemen, a momentum [and momentous] shift on the monthly MACD.
No guarantee of certainty, but certainly a strong indication of the #Bitcoin macro turnaround… given the previous historical trend. pic.twitter.com/HiuPDT9xiU
— dave the wave🌊🐫 (@davthewave) November 1, 2022
This macroeconomic turnaround however, shows a long-term change of the trend around Bitcoin. We may have to expect a further drop in BTC in the coming days before the crypto recovers. To advance its words, “Dave the wave” relies on previous data from Bitcoin to affirm that it will probably arrive at a new phase of transition.
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