Ask 100 market analysts when to buy or sell a Cryptocurrency and you’ll get 100 different answers.
Some methods of valuation are better than others. One simple method I like is called the Mayer Multiple (MM).
Trace Mayer is the man behind the Mayer Multiple but it’s on The Investor Podcast site where they’ve taken this metric to a new level. I encourage you to watch this video or visit the Investor Podcast site to learn how the Mayer Multiple works and in what scenarios. From a high level, the MM is used to gauge if Bitcoin is over or under valued relative to price history. This is very helpful for knowing when to enter or exit positions especially in volatile, emotional roller coaster markets like Crypto.
There’s a also a MM Twitter account for daily updates.
Sep 30, 2018: The current Mayer Multiple is 0.90 with a $BTC price of $USD 6,606.15 and a 200 day moving average of $7,351.79 USD. The @TIPMayerMultple has historically been higher 76.75% of the time with an average of 1.53. Learn more at: https://t.co/9n0xlTWuNP
— Mayer Multiple (@TIPMayerMultple) September 30, 2018
However, there is no MM data for Bitcoin Cash. Bummer. I wanted to see the MM applied to BCH so I replicated the MM on Bitcoin Cash. Here are the results:
Link to Google Doc with data and chart here.
Zooming in on the chart using TradingView you can see a clear support in terms of MM. Note: TradingView is not 100% match to the Google Doc due to limited price history in TradingView but it’s close enough to use for our purposes.
The MM chart may look a lot like a price chart at first glance but it isn’t. The difference between a MM chart and a price chart is that MM is displaying an asset’s value relative to price history. While past performance does not guarantee future results if you’re looking for a metric to tell you if it’s a good time to buy or sell in strong or weak moves the MM deserves a place in your toolkit.