Bitcoin possibly undervalued as Mayer Multiple hits lowest since FTX collapse

A widely used Bitcoin valuation indicator is currently 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, has considered a reading below 2.4 “buy” territory.

According to Glassnode, on Aug. 5, the Mayer Multiple was at a value of 0.88 when Bitcoin fell to $49,751. Since Bitcoin’s recent rebound, the metric has risen, but just barely, to 0.93, according to Bitcoin analytics firm BitBo data.

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

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

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

“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 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.