When will the bottom be reached?

For many new Bitcoiners, the sector’s recent plunge was a first. So many are becoming acquainted with the notorious price volatility for the first time. But even compared to past bear markets, the current downward trend is anything but a bed of roses. On the contrary, as the market analysts of glass node to sum up recently, there is a lot to be said for a sell-off of historic proportions.

If you take the first local top of the last bull market as a benchmark, the cryptocurrency has already been falling for 435 days. That would make it the longest bear market in digital gold history, analysts said.

Mayer Multiple at record low

The Mayer Multiple is considered by market observers to be a solid chart mark for identifying clearly over- or undervalued markets. The value is obtained by dividing the current price by the 200-day moving average. In the history of Bitcoin, there have only been four examples of a Mayer multiple below 0.5 (see chart).

Indirectly, each of these situations was a bottom indicator and marked the beginning of a new bull market. As of now, the Mayer Multiple is at 0.55, which is at absolute capitulation level.

The MVRV also sends out a ground signal. This is the ratio of realized market capitalization and the classic market cap. The realized market cap is found by adding the value of all coins at the time of their last movement. It thus reflects the value “stored” in Bitcoin. If the quotient is below 1, Bitcoin is considered undervalued. At the time of writing, the MVRV is 0.93. This means that digital gold can be described as undervalued.

However, the macroeconomic environment is still characterized by uncertainty. The quarrels surrounding the Celsius lending service have still not been resolved. Should Celsius go bankrupt, further sell-offs are likely to follow. So caution is still required.

Disclaimer: The analyzes presented here do not represent buy or sell recommendations. They merely reflect the opinion of the editor.