Introduced by Trace Mayer as a way to gauge the current price of Bitcoin against its long range historical price movements (200 day moving average), the Mayer Multiple highlights when Bitcoin is overbought or oversold in the context of longer time frames.
It`s worth noting as the market becomes larger and less volatile, the peaks are becoming less exaggerated. In this version, I have recalibrated what constitutes the overbought/oversold extremes by plotting Mayer Multiple measured in 4-year moving standard deviations from its mean.
The Mayer Multiple is calculated by dividing the Bitcoin Price by the 200 day moving average of the price. In this adjusted version, I apply a log transform and then a 4-year z-score.