Bitcoin (BTC) tries to recover a major long-term moving average, but time to buy is before, not after, one metric hints.
Multiple Mayer Approaching Axis
Bitcoin price strength continued as the week began, with the largest cryptocurrency hitting 2022 highs overnight.
Some of the major moving averages have also fallen to the bulls, and although the trend is not final yet, optimism is building that even Bitcoin challenge November’s all-time highs based on this fact.
Next in line, meanwhile, is the 200-day moving average (DMA), currently at $48,300 and just tapping in the past 24 hours. The 200DMA is a key component of the Mayer Multi Scale, which measures the ratio of the spot price to it in order to identify potential profitable market entry points.
A score of less than 2.4 on the multiplier tends to indicate good long-term rewards for investors. Having bottomed in January at around 0.76, its trend has since reversed, and as of Tuesday – around the 200MA – Bitcoin has a Mayer Multiple score of 0.98.
“This is a good time to buy,” Ecoinometrics argued in the comments, adding that even if the 200DMA breakout ends up in a bull trap, losses in such situations have historically been “small.”
Another post continued: “Although the overall background doesn’t look good, this is a buy.”
“When it comes to these strategies with asymmetric returns, you have to be methodical.”
Derivatives lose their speculative color
These macro tensions, which include inflation and central banks’ attempts to combat it by tightening monetary policy, remain a major topic of discussion this month.
As Cointelegraph mentionedSeveral analysts have warned that expectations could turn strongly against bitcoin and risky assets more broadly as interest rates rise and an “inflationary” environment emerges.
The sense that the continued rally in BTC cannot form the new paradigm is evident among professional traders, as derivatives markets funding rates remain flat despite weekly gains close to 20% for BTC/USD.
“Excessive speculation in the long-biased derivatives market is close to non-existent at the moment,” analyst Dylan Leclerc noted in a Twitter thread on Monday.
Presented below are annual perpetual (24-hour MA) future financing rates.
Merchants were paying around 100% annually for purchase BTC dollars In early 2021. A similar but less intense speculative market arose in the fall.
Today? Funding has been flat/negative for most of 2022.
– Dylan LeClair (@DylanLeClair_) March 28, 2022
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