I use several Technical Analysis indicators including Ichimoku Cloud, Renko charts, MA crosses, trendlines etc.
One indicator many people reference specifically in trading BTC is called the Mayer Multiple. The Mayer Multiple is explained here.
Here is a chart of the Mayer Multiple for Bitcoin SV compiled from daily closing price on coinmarketcap.com. MM in blue, 21MA of the MM in red, Price in yellow.
(caveat: plot points before June contain less than 200 days of historical data)
We are looking for extreme deviations from the mean for trading signals.
There have been 9 days in 2019 the MM was below .7 with prices in the low $50 range. When MM approaches .7 in the future this would indicate time to buy as price is severely depressed compared to the past 200 days.
With the overnight swoon in crypto prices BSV Mayer Multiple is now at .67 which is a BUY signal.
There have been 8 days the MM was above 2.6 with prices above $200. A Mayer Multiple this high is a sell signal. Those sales would have been very near the recent top when correlating with price.
Compare these MM numbers against stocks and you’ll note stocks are rarely below .9 or above 1.3. Crypto is volatile on a daily basis. By charting the magnitude of deviation from a slow moving long term average we are able to evaluate objective data about when is a good time to buy or sell.
Hindsight being 20/20 we wouldn’t have known looking at a price chart these were the bottoms and tops at that time. Looking at price can stir emotions and we know emotions are the death of good trading. However, looking at Mayer Multiple it’s clear that the MM was very far from the mean and should be treated as a trading signal.
The current MM is ~.67. The past 200 days the MM has been higher 80% of the time. Keep in mind the Mayer Multiple is not a fast moving signal and as always balance any trading signals with your own research and fundamentals.
On a personal note, I’m back in Thailand till late October. Here’s a song remix from Thailand’s most popular Reggae band.