Recent on-chain data shows that the Bitcoin price is currently at an important 
phase, raising suspicions as to whether the market is nearing a cyclical 
bottom. Mayer Multiple Falls To 0.6 — What This Means In a recent Quicktake 
post on the CryptoQuant platform, on-chain analyst Ruga Research pointed out 
that the Bitcoin price now has a 40% negative deviation from its 200-day 
moving average. This on-chain observation revolves around the Bitcoin Mayer 
Multiple. Related Reading: Bitcoin Drifts Into A Deep Conviction Zone, Smart 
Money Stays Patient For context, the Mayer Multiple metric tracks how far a 
coin&#8217;s current price is trading above or below its long-term trend. This 
indicator is able to achieve this by dividing the price by its 200-day moving 
average. When the metric shows a reading of 1, it typically means that the 
Bitcoin price is trading approximately at the 200-day MA. Meanwhile, readings 
above 1 reflect that the Bitcoin price is at a premium relative to its long- 
term trend, while readings below 1 suggest that the price is trading at a 
discount. Historically, the metric has several thresholds in tandem with 
market conditions. For example, when the metric reaches levels above 2.4, it 
often signals that the Bitcoin price is at an overbought zone (also known as 
the bubble territory). As explained earlier, 1 &#8211; 1.5 represents the normal 
bull-market range, while 0.8 &#8211; 1.0 is typically the discount zone (where 
accumulation often occurs). Notably, when the price falls to regions below 
0.8, it signals that the Bitcoin price has been oversold, as a result of 
capitulation events. Ruga Research revealed that the metric is currently at 
0.6, reflecting an approximate 40% deviation below Bitcoin&#8217;s long-term trend. 
Hence, it is apparent that the Bitcoin price stands at a statistical extreme. 
Historical data where the Mayer Multiple fell to similar levels also adds 
credibility to this level&#8217;s relevance. In December 2018, the metric dropped to 
the 0.5 &#8211; 0.6 range (near Bitcoin&#8217;s market bottom around $3,200) before the 
price witnessed a more than 540% growth. Similarly, the metric fell to 0.5 
owing to the COVID crash, followed by a recovery and expansion of the Bitcoin 
price by 1,100% in another 12-month period. This scenario also repeated in 
November 2022, with the Mayer Multiple falling to the same region, after which 
the BTC price soared by over 170%. However, Ruga Research mentioned, as a 
caveat, that the metric does not precisely spot where and when a bottom will 
form, but merely reveals what to expect in the long-term. It is also possible 
that the metric could record further downside moves or see some consolidation 
before going to the upside. Bitcoin Price At A Glance As of this writing, 
Bitcoin is worth approximately $70,383, reflecting an over 2% jump in the past 
24 hours. Related Reading: Coinbase Premium Turns Positive Since Mid-January 
As Bitcoin Sees Price Relief Featured image from iStock, chart from 
TradingView

Bitcoin Is Trading 40% Beneath Its 200-Day MA — What’s Next?

Analysts forecast Block to post $403 million in Q4 profit on $6.25 billion 
revenue, following a third quarter marked by strong gross profit growth but 
mixed market reaction.

Jack Dorsey’s Block may cut up to 10% of staff in business overhaul: Report

Since reaching its current all-time-high price of $126,000 in October last 
year, the Bitcoin market has been on a sell-off, translating into surmounting 
bear pressure. As a result, the flagship cryptocurrency has maintained a 
steady decline, falling until it recently reached $60,000 — a deviation of 
more than 52% from its all-time high. Bitcoin currently seems to be seeing a 
rebound, but price action alone reflects that it could as well be one of its 
short-term recoveries. Interestingly, a recent on-chain evaluation suggests 
that the current upward movement may be driven by a significant underlying 
metric. Related Reading: Bitcoin Taker Buy Ratio Signals Peak Bearish 
Sentiment — Relief Soon? What The Bitcoin Sharpe Ratio Is Saying In a 
Quicktake post on CryptoQuant, Darkfost reveals that the Bitcoin Sharpe Ratio 
is now at a zone historically relevant to the ends of bear markets. The Sharpe 
Ratio is a risk-adjusted performance metric that measures how much return an 
asset (Bitcoin, in this case) generates for risk taken. A high ratio signals 
that returns are strong in relation to risks taken; a declining ratio, on the 
other hand, reflects weakening returns, while risk remains elevated. On the 
severe end of the metric, a very low or negative Sharpe Ratio is a sign that 
market participants are taking very high risks for poor or negative returns. 
It is worth noting that very low Sharpe ratios are frequently seen during deep 
bear markets or even capitulation phases. According to historical data, 
Darkfost explains that the Sharpe Ratio is currently at a level so low as to 
be reminiscent of the final phases of past bear markets. This means that the 
Bitcoin price holds a higher practical risk, compared to returns, for current 
investors. Notably, the Sharpe ratio is not just at a low point, but continues 
in a steady state of decline. This, according to the market quant, is a sign 
that Bitcoin&#8217;s performance is yet to be attractive to any willing risk-taker. 
However, it is this specific dynamic that sets the pace for a turnaround in 
Bitcoin’s price. This is because sustained poor returns typically force 
capitulation events, where weaker hands are flushed out; this eventually sets 
the stage for renewed accumulation among stronger hands. Related Reading: 
Forget A Bitcoin Yearly Top, BTC Price Might Have Hit A 16-Year Cyclical Peak 
Two Main Approaches To Consider In This Scenario: Analyst Seeing as the 
current market condition is still mostly uncertain, Darkfost offers two ways 
to engage the current scenario. First, the analyst states that investors could 
begin increasing exposure gradually, and in line with the ratio’s movement 
towards lower risk zones. Second, Darkfost explains that a market participant 
could decide to wait for clear improvements in the Sharpe Ratio before 
entering the market at all. This is to serve as a confirmation strategy for 
the purpose of investor safety. However, Darkfost notes that the present bear 
phase could last a couple more months before any true reversal is seen, 
regardless of the signal being flashed by the Sharpe Ratio. As of this 
writing, Bitcoin stands at a $69,064 valuation. CoinMarketCap data reflects a 
1.71% loss over the past day. Featured image from Unsplash, chart from 
Tradingview

Bitcoin Sharpe Ratio Sinks To Historical Lows — Accumulation Next?

Welcome to Latam Insights, a compilation of the most relevant crypto news from 
Latin America over the past week. In this week’s edition, the Brazilian 
government is preparing to introduce a decree to pave the way for taxing 
cryptocurrency flows, Venezuela offers gas bitcoin mining opportunities, and 
new Libra revelations arise. Brazil Prepares to Tax […]

Latam Insights: Brazil Prepares to Tax Crypto Flows, Venezuela Offers Flared-Gas Bitcoin Mining Opportunities

Ethereum (ETH) has declined noticeably over the past week, with price data 
from CoinMarketCap reporting a net 14% decline within this period. At the time 
of the most recent data, ETH is trading around $2,000, significantly lower 
than the past week&#8217;s level near $2,500. Related Reading: Ethereum Price Is Not 
Going To Keep Falling Forever, Analyst Says ETH Funding Rates Signal A Bullish 
Turn In a QuickTake post on the CryptoQuant platform, analyst Amr Taha draws 
attention to recent developments in ETH funding rates, a key sentiment 
indicator in perpetual futures. The funding rate shows the market sentiment, 
whether it&#8217;s optimistic/greedy (positive) or fearful/cautious (negative). 
Typically, when funding is highly positive or negative, it means that too many 
traders are on one side, positions are overleveraged, and then the market 
becomes unstable. At that point, even a small price move in the opposite 
direction can trigger liquidations, causing sharp and fast price moves. 
Although Ethereum&#8217;s funding rate was deeply negative over the week, analyst 
Amr Taha noted there has been a flip as ETH derivatives data shows a clear 
shift toward bullish positioning. Notably, Funding rates have turned strongly 
positive on BitMEX (Bitcoin Mercantile Exchange), reaching 0.049%, their 
highest level since October and well above the previous peak near 0.03. This 
signals aggressive leverage on the long side. Related Reading: XRP Price Has 
Just Reached Most Oversold Level In History And This Analyst Is Predicting A 
Bounce Extreme Optimism In ETH Could Spark Sharp Moves At the same time, ETH 
funding on Binance has moved from deeply negative levels at -0.025% on 
February 5 back towards neutral, indicating that short positions are being 
replaced by new long exposure. In essence, the market has moved from fear to 
optimism. While this shift reflects a rise in bullish sentiments, history 
shows that periods of extreme positive funding driven by leverage often 
increase the risk of liquidations and sharp corrective moves, rather than 
supporting sustained upside. In short, when everyone is bullish at the same 
time, the market becomes easier to knock over. In all, Ethereum Derivatives 
traders have become aggressively bullish, and while that can push price higher 
in the short term, history shows it often increases the risk of sudden 
corrective moves rather than a sustained uptrend. At the time of writing, 
Ethereum trades at $2,089 after a 14.9% decline in the past seven days. 
Meanwhile, the daily trading volume is down by 32.39% and valued at $37.39 
billion. Featured image from Adobe Stock, chart from Tradingview

Cryptocurrency price in EUR