Bitcoin possibly undervalued as Mayer Multiple hits lowest level since FTX collapse

The popular Bitcoin valuation metric hasn’t been at this level since November 2022, when cryptocurrency exchange FTX went down.

A widely used Bitcoin valuation indicator is flashing red, signaling that Bitcoin hasn’t been this undervalued since the collapse of the cryptocurrency exchange FTX at the end of 2022.

“If you believe the Bitcoin price will be higher in 6-12 months, then this is objectively a fantastic time to buy,” crypto education resource On-Chain College wrote in an Aug. 7 X post, referring to the Bitcoin (BTC) Mayer Multiple chart.

The indicator compares Bitcoin’s current price to its 200-day moving average, and the resulting ratio is used as a buy or sell signal. Its creator, Trace Mayer, considers a reading below 2.4 to be “buy” territory.

According to Glassnode, on Aug. 5, the Mayer Multiple had a value of 0.88 when Bitcoin fell to $49,751. Following Bitcoin’s rebound, the metric has risen slightly to 0.93, according to Bitcoin analytics firm BitBo data.

Analysts suggest this means the asset is still undervalued, as the Mayer Multiple has been “higher 70%” of the time since Bitcoin’s creation.

Despite the metric, other crypto analysts recommend that Bitcoin traders hold off for now in case of further dips in the near term.

On Aug. 6, 10x Research head of research Markus Thielen stated, “To ideally time the next bull market entry, we aim for Bitcoin prices to fall into the low 40,000s.”

Related: Bitcoin decline is similar to the start of the 2016 bull run — Peter Brandt

“We would then expect another major rally attempt,” Thielen told Cointelegraph.

Meanwhile, popular crypto trading account “wallstreetbets” pointed to the recent dip in Bitcoin’s price, reiterating in an Aug. 6 X post that “Everyone gets Bitcoin at the price they deserve.”

“If the $60,000 support is lost on a closing basis, we may see a retest of the long-term trendline support before higher,” pseudonymous crypto trader Mags added.