Bitcoin Still Undervalued After Q2 Rally, Price Metric Shows

Bitcoin's Mayer multiple indicates the cryptocurrency is undervalued despite having rallied by over 40% this quarter.

AccessTimeIconJun 18, 2020 at 11:29 a.m. UTC
Updated Sep 14, 2021 at 8:53 a.m. UTC

Bitcoin remains a bargain despite having carved out solid gains in the second quarter, according to one price metric. 

At press time, the cryptocurrency is trading near $9,450 – up nearly 47% so far this quarter and has gained 145% from the low of $3,867 observed on March 13, according to CoinDesk’s Bitcoin Price

Despite the recent rise, bitcoin’s Mayer multiple – the ratio of the cryptocurrency’s price to its 200-day moving average – currently stands at 1.15, according to

A below-2.4 ratio indicates the cryptocurrency is undervalued. Once the ratio rises above that level, it indicates that bitcoin may be overbought and a speculative bull frenzy has set in. That often leads to a price bubble and a subsequent crash. 


For instance, the ratio rose above 2.4 on Dec. 1, 2017, following which bitcoin doubled in value to $20,000 in just two weeks only to fall back to $12,000 on Dec. 22. Similarly, an above-2.4 ratio marked market tops in April 2013 and December 2013. 

So, with the ratio currently down more than 50% from the key 2.4 level, the path of least resistance for bitcoin appears to be on the higher side – more so, as bitcoin's Mayer multiple is still below its lifetime average of 1.44. 

The ratio has been higher than the current level of 1.15 nearly 52% of the time, as noted by Mayer Multiple’s twitter handle. “This is a good time to stack sats,” tweeted Ecoinometrics, a bitcoin analysis company, referring to satoshis, small divisions of a bitcoin.

Simulations performed by Mayer Multiple’s founder Trace Mayer show that in the past an investor would have achieved better results by accumulating bitcoin when the ratio was below 2.4.

That said, the Mayer multiple is a technical analysis tool and its accuracy in predicting undervalued/overvalued conditions is not guaranteed.

And expecting past performance to hold consistent for future performance is risky as market conditions change. For instance, bitcoin’s correlation with the equity markets has strengthened this year and the cryptocurrency may suffer sharp losses if stocks crash on renewed coronavirus fears. 

However, on-chain activity is supportive of the bullish picture painted by the Mayer multiple. The number of bitcoin whales or entities holding more than 1,000 coins recently rose to 1,844, the highest level since November 2017, as noted on Wednesday

Retail interest, too, is at record highs, as tweeted by Ciara Sun, head of global business and markets and vice president at cryptocurrency exchange Huobi. 


The continued accumulation of bitcoin by both retail and large investors indicates confidence in the long-term bullish narrative surrounding bitcoin. Whether that confidence is justified, only time will tell.

Disclosure: The author holds no cryptocurrency at the time of writing.


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