Bitcoin (BTC) is attempting to reclaim a key long-term moving average, but the buy time is here, not after a metric clue.
in one series of tweets On March 29, on-chain monitoring resource Ecoinometrics eyed a classic entry for BTC/USD denoted by the Mayer multiple.
Mayer Multiple nears pivot
Bitcoin price strength has continued at the start of the week, the largest cryptocurrency hitting its highest levels of 2022 overnight.
A few key moving averages have also fallen on bulls, and while the trend is not final yet, optimism is mounting that Bitcoin could even challenge November’s all-time highs as a result.
Next is the 200-day moving average (DMA), which is currently at $48,300 and has only been tapped in the last 24 hours. The 200DMA is a key component of the Mayer Multiple metric, which measures spot price ratio to determine potential profitable market entry points.
A score below 2.4 on the multiple tends to signal good long-term returns for investors. After bottoming at around 0.76 in January, its trend has since reversed, and as of Tuesday – almost right at the 200MA – Bitcoin has had a Mayer Multiple Score of 0.98.
“This is a good time to buy,” Ecoinometrics argued in comments, adding that losses in such situations have historically been “small” even if a breakout of 200DMA becomes a bull trap.
“Even though the macro background doesn’t look great, this is a buy,” continued another post.
“These asymmetric return strategies require a systematic approach.”
Bitcoin Mayer Multiple chart (screenshot). Source: BuyBitcoinWorldwide
Derivatives lose their speculative coloring
These macroeconomic tensions, which include inflation and central banks’ attempts to combat them with monetary tightening, remain a key topic of discussion this month.
Related: Buying Pressure “In Bull Market Territory” – 5 Things to Know About Bitcoin This Week
As Cointelegraph reported, several analysts have warned that the outlook could still clearly turn against Bitcoin, putting assets at risk more broadly if interest rates rise and a “stagflationary” environment emerges.
The sentiment that a sustained rally in BTC cannot possibly form the new paradigm is evident among professional traders as derivatives markets funding rates remain flat despite weekly gains of nearly 20% for BTC/USD.
“Excessively long, biased speculation in the derivatives market is pretty much non-existent right now,” analyst Dylan LeClair noted Monday in a Twitter thread on the subject.
Shown below are annualized perpetual future funding rates (24 hour MA).
Traders paid ~100% annualized to go long $BTC Early 2021. A similar but less severe speculative market emerged in the fall.
Today? Funding was flat/negative for most of 2022.
2/3 pic.twitter.com/lliXS72hrR
— Dylan LeClair (@DylanLeClair_) March 28, 2022
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