Bitcoin has plenty of scope to extend its current rally, a price indicator suggests, even as the cryptocurrency is fast closing in on the record high near $20,000 set three years ago.

With prices rising by 80% to levels above $18,000 in the past six weeks, the cryptocurrency’s Mayer Multiple – the ratio of price to the 200-day moving average – has risen to a 16-month high of 1.67. However, the metric is still well short of the 2.4 threshold that has historically signaled the final leg of the bull markets.

The Mayer Multiple flashed similar values around bitcoin‘s second mining reward halving in July 2016. Back then, bitcoin was trading at $650 and went on to hit highs near $20,000 in December 2017.

The ratio rose above 2.4 on Dec. 1, 2017, following which bitcoin doubled in value to $20,000 in just two weeks before falling back to $12,000 on Dec. 22. Similar price action was observed in April and November 2013 after the ratio rose above 2.4. Bitcoin also topped out at $13,880 at the end of June 2019 with the ratio rising above 2.4.

btc-mayer
Bitcoin daily chart
Source: TradingView

With the Mayer indicator currently hovering at 1.67, bitcoin appears to be in the early stages of the bull market, with plenty of room to extend the rally from the low of $3,867 seen since mid-March.

According to Nischal Shetty, CEO of Mumbai-based crypto exchange WazirX, bitcoin is replicating price moves seen following previous halvings – four-yearly reductions in the rewards for miners. The cryptocurrency underwent its third halving on May 11, when prices were around $8,600.

While the recent sharp rise from $10,000 looks similar to the surge from $6,000 to $20,000 seen in November-December 2017, this time may be different. Institutions appear to have been the primary drivers of the latest rally, while the one seen three years ago was driven by speculative frenzy and panic buying by retail investors.

Google Trends, a barometer used to gauge retail interest in trending topics, is currently returning a value of 13 for the worldwide search query “bitcoin price.” That’s significantly lower than the value of 93 observed in early December 2017.

That’s a likely sign that FOMO has yet to take hold of the market. Retail investors are usually the last to join a rally. As such, increased retail participation is widely considered a sign of an asset nearing a major top. 

Read more: HODL FOMO vs. Speculative FOMO: Why This Bitcoin Bull Market Will Be Different

The Google search data appears to validate the Mayer Multiple’s signal that the market is not yet “euphoric” and the ongoing rally has legs.

WazirX’s Shetty expects retail investors to jump in once prices rise above $20,000.

At press time, bitcoin is changing hands near $18,030, representing a 150% year-to-date gain, according to The CoinDesk 20.

Disclosure: The author holds small positions in bitcoin and litecoin.

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