The price of Bitcoin looks bad, but I’m buying it. Prices can and always will go down, but there is value at this level and I am accumulating. I think it’s important to be honest about how you’re actually acting on the analysis you publish, rather than just presenting data from afar. And now the data is saying something that has only been said a few times in the entire history of Bitcoin.
Let’s get down to business:
- The Crosby ratio Z-score is one of the lowest measurements in history.
- The RSI is at a level that has only been encountered a few times during extreme market lows.
- Bitcoin has rebounded from its 200-week moving average.
- SOPR is in the bottom 5th percentile of all historical measurements.
- The Mayer multiple also ranks in the bottom 5th percentile.
crosby ratio
The Crosby Ratio Z-Score measures Bitcoin’s price momentum and normalizes it to Bitcoin’s evolving volatility. This is not a fixed threshold, but adjusts as the market matures and volatility compresses, so it can be applied at any stage in Bitcoin’s history. The current reading is approximately -1.7. This means that 99.8% of all days in Bitcoin’s history recorded less extreme readings on this indicator.
Figure 1: The Crosby Ratio Z-score has just fallen to one of its lowest values ever.
A list of examples where this measure was low: the recent drop to $60,000, the first dip below $20,000 in 2022, the March 2020 COVID-19 crash, and the 2018 bear market low. that’s it. There have been four incidents in the history of the price over 10 years. Each of them turned out to be an important accumulation opportunity.
RSI
The relative strength index is one of the most widely used momentum indicators in all markets. Bitcoin’s weekly RSI is currently at one of its lowest levels in history. Previous lows this low include the 2015 bear market low, the 2018 bear market low, the coronavirus crash, and the recent drop to $60,000.
Figure 2: Relative strength index is comparable to historical lows.
Two independent momentum indicators. The measurements are completely different, but produce the same short list of historical comparisons. This confluence between methodologies cannot be ignored.
200 week moving average
The 200-week moving average has served as bear market support throughout Bitcoin’s history. The only meaningful exception was the FTX collapse in late 2022, which caused a brief but sharp undershoot before a rapid recovery. Outside of that event, this level is maintained as the floor for each cycle.
Figure 3: Bitcoin currently sits just above the 200WMA.
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Bitcoin has just rebounded from that level again. Directly below the current price is a recent cycle low, creating a potential double-dip structure, which is one of the more reliable technical formations in any market. The 200-week moving average and Bitcoin realized price have converged in roughly the same zone, lending further weight to this level as meaningful structural support.
SOPR and Mayer Multiple
Expenditure return currently ranks in the bottom 5th percentile of all historical measurements. This means the Bitcoin network’s overall realized loss rate, or the rate at which holders sell at a loss, is 5%, the most severe ever recorded. The sell-off that caused this move is primarily short-term in nature. The value date on which the data was destroyed confirms that long-term holders have little participation in this liquidation. These are short-term traders and leveraged positions being unwound, not convicts surrendering.
Figure 4: Expenditure return shows the severity of recent losses.
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The Mayer Multiple, which measures Bitcoin’s price relative to its 200-day moving average, is also in the bottom 5th percentile. When these two indicators were at their historical lows at the same time, the resulting accumulation opportunities were exceptional. This has only happened a few times, and each time there has been a significant price increase.
Figure 5: The Mayer Multiple has reached a level corresponding to the previous bear cycle low.
In summary
To be honest, I was surprised at the force of the decline. I was expecting a pullback from the $80,000 resistance zone, but the move above $70,000 was more rapid than expected. What didn’t surprise me was the data that emerged as a result. Because this kind of confluence across technical, on-chain, and momentum indicators has appeared before, and the market has consistently rewarded the accumulation of these measurements.
Can I go further down? yes. The realized price is not far below current levels, and a revisit to the lows would be the next meaningful support zone. I’m ready for that scenario. But if we eliminate all emotion and focus purely on what the data is showing us: five independent signals occurring simultaneously in the generation space, now is not the time to wait for a slightly better price.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please be sure to do your own research before making any investment decisions.
This post, “The 5th Worst Bitcoin Price Action of All Time — I’m Buying 99.8% of the Time” was first published in Bitcoin Magazine and written by Matt Crosby.
