Bitcoin, Ethereum, Crypto News & Price Indexes

Bitcoin (BTC) has entered the “darkest days” of its bear market correction, based on a classic BTC price indicator hitting near four-year lows.

Key takeaways:

• Bitcoin Mayer Multiple fell to 0.65, matching deep bear market lows in May 2022.

• A repeat of 2022 would see BTC drop further to as low as $40,000. 

Mayer Multiple returns to May 2022 levels

Bitcoin’s 45% crash from its $126,000 peak has placed onchain indicators in focus as market participants search for where BTC price is likely to bottom. 

The Mayer Multiple is among the indicators suggesting that a bottom could be reached soon.

In a post on X on Tuesday, analyst On-Chain College said that the Bitcoin Mayer Multiple score had dropped to levels “usually reserved for deep bear market corrections.”

Related: BTC traders wait for $50K bottom: Five things to know in Bitcoin this week

The indicator measures Bitcoin’s current price against its 200-day moving average, and the resulting ratio is used as a buy or sell signal. Its creator, Trace Mayer, originally gave a reading of below 2.4 as “buy” territory, the red line in the chart below.

Data from on-chain analytics firm Glassnode shows that as of Feb. 9, the Mayer Multiple measured 0.65, below its “oversold” 0.8 level (green band), a reading last seen in May 2022.

“Bitcoin is now officially under the green band of the Mayer Multiple Z-Score, which is usually reserved for deep bear market corrections,” On-Chain College wrote, adding:

“It can still take months before finding a bottom, but BTC is in a period in history typically reserved for the darkest days of bear markets.”

Levels like this have historically marked some of Bitcoin’s best long-term buying opportunities.

The Mayer Multiple at 0.6 means that Bitcoin is trading 40% below its 200-day MA, analyst CryptosRus said in a Sunday X post, adding:

“This doesn’t happen during normal pullbacks. It only shows up during full-blown capitulation.”

“Historically, being below this level is exactly where I want to be stacking,” said analyst On-Chain Mind, while Capriole Investments founder Charles Edwards said: 

“This is historically one of the best buy signals in Bitcoin history.”

Extreme lows in the Mayer Multiple do not always correspond to BTC price floors. In mid-2022, the indicator bottomed at around 0.47. But the BTC/USD pair dropped another 58% over the following four months before reaching the bottom at $15,500.

Where is Bitcoin’s real bottom?

As Cointelegraph continues to report, the question of whether Bitcoin price has already hit its bottom below $60,000 remains a topic of debate as several metrics still suggest that BTC’s downside may not be over. 

The 200-week MA, currently at $58,000, is often considered the ultimate support level for Bitcoin in bear markets. This level is approximately 15% below the current price.

Historically, BTC/USD has dropped to this level in extreme bearish conditions, but has rarely dropped below it except in 2020 and 2022, with losses averaging 30%.

Therefore, Bitcoin could drop lower to retest the 200-day MA at $58,000, but in extreme cases, it could fall another 30% toward the $40,000 zone.

This target is reasonable based on the relative strength index (RSI), which can still drop another 55% from its 37 mark, bringing Bitcoin to the lower $40,000 region, said Jelle in a recent analysis on X. 

Historically, the lows have been less deep, making 55% an “extreme” dip, the analyst said, adding that 40% below the RSI’s 37 level would be in line with the last two bottoms, which would be around $52,000 before summer.

“There’s decent confluence around that area for me to at least pay close attention to the low $50Ks.”

As Cointelegraph reported, Bitcoin could find a “real bottom” around $50,000 in a repeat of the 2022 bear market.