Bitcoin (BTC), which is trying to reclaim the key long-term moving Average, is trying to do so. However, the time to purchase is before one metric hints.
Ecoinometrics, a monitoring tool for the chain, tweeted a series on March 29 that highlighted a classic entry to BTC/USD flagged by Mayer Multiple.
Mayer Multiple nears pivot
As the week begins, Bitcoin’s price strength continues. The largest cryptocurrency has posted its highest levels since 2022 overnight.
Bulls have also flipped some key moving averages. While the trend isn’t yet clear, there is growing optimism that Bitcoin may surpass November’s all time highs.
The 200-day moving average is next, currently at $48,300, and was just tapped in 24 hours. The 200DMA is an important component of the Mayer Multiple Metric, which measures spot prices ratio to it to determine profitable market entry points.
Scores below 2.4 on Multiple are a sign of good long-term returns for investors. It had a January bottom at 0.76. Since then, the trend has reversed and Bitcoin now has a Mayer Multiple score 0.98.
Ecoinometrics commented, “That’s an excellent time to buy,” adding that even though a breakout of the 200DMA could be a bull trap, historical losses have been “small” in such situations.
“So even though it doesn’t look good on the macro backdrop, this is a buy,” continues another post.
When it comes to strategies with asymmetric returns, you need to be systematic.”
Bitcoin Mayer Multiple chart (screenshot). Source: BuyBitcoinWorldwide
Derivatives lose the speculative edge.
These macro tensions include inflation and the central banks’ efforts to combat it with tightening monetary policy. They remain a major topic of discussion this month.
Related: 5 Things You Need to Know About Bitcoin This Week
Cointelegraph reported that multiple analysts warned that Bitcoin and other risk assets could be negatively affected by rising rates and an “inflationary” environment.
Professional traders feel that BTC’s sustained rally is unlikely to create a new paradigm. This is evident because derivatives market funding rates are still flat, despite weekly gains of 20% for BTC/USD.
Analyst Dylan LeClair observed Monday that “excessive, long-biased derivative market speculation is almost non-existent currently”, in a thread on Twitter.
Below are the annualized perpetual funding rates (24-hour MA). To trade $BTC early 2021, traders were paying around 100 percent annually. In the fall, a similar but less severe speculative marketplace arose. Today? For most of 2022, funding has been negative or flat. 2/3 pic.twitter.com/lliXS72hrR
— Dylan LeClair (@DylanLeClair_) March 28, 2022com. You should do your research before making any investment or trading decision.
Eileen Wilson –Technology and Energy
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