What is the Mayer Multiple?
The Mayer Multiple is a ratio that describes the relationship between Bitcoin’s price right now/today, compared to (divided by) Bitcoin’s 200-day moving average price. The relationship is described below:
Mayer Multiple = ($BTC today) / ($BTC 200-day moving average)
Why do we need or care about the Mayer multiple? What does the Mayer Multiple mean? Great questions.
The Mayer Multiple helps us compare the price of Bitcoin today, compared to the price of Bitcoin over the past 200 days. This gives us a longer-term comparison to its price today versus the last six months and helps us determine if Bitcoin is overbought or oversold. It helps to utilize a mathematical approach to Bitcoin’s price in relation to Bitcoin’s recent history, taking some emotion out of your decision-making process.
A higher Mayer Multiple would suggest that Bitcoin is being overbought and that the price is high relative to the 200-day moving average. A lower Mayer multiple would suggest that Bitcoin is being oversold and that the price might be low relative to the 200-day moving average.
The average Mayer Multiple for Bitcoin’s history is ~1.47.
Today’s (27th July 2019) Mayer Multiple is ~1.5. Which is about average. All this tells us is that there is a 50% chance Bitcoin will go above or below today’s price.
The Mayer Multiple is not itself financial advice. You must always do your own research and draw your own conclusions using all the information that you have. The Mayer Multiple is not a buy or sell signal or advice. It is a data point describing the relationship between two numbers, and you may use that as an input to make your own financial decisions.
See my post on How To Value Bitcoin.
Mayer Multiple Resources:
- WooBull Charts About Mayer Multiple
- The Investor’s Podcast post on Mayer Multiple
- Mayer Multiple Twitter Page