Although Bitcoin (BTC) is currently stabilising at $47,000, lengthier timeframes reveal the magnitude of this week’s tiny bull run.
BTC/USD recaptured an important support zone for securing further higher on March 27, according to the Golden Ratio Multiplier (GRM) indicator.
GRM is a long-term price observation metric for Bitcoin. It’s used to see if Bitcoin’s price increase (or lack thereof) is out of proportion to its overall maturity as an asset in terms of acceptance.
It achieves so by employing a log scale that incorporates Bitcoin’s 350-day moving average (DMA) as well as Fibonacci sequences to generate multiples of that trendline.
As a result, BTC/USD sliding below the 350DMA is now a clear sign of outlier price activity, as the great majority of days since mid-2019 have been spent above it.
Logarithmic extremes become less prominent as Bitcoin matures and acceptance spreads.
“The Golden Ratio Multiplier is a helpful tool because it can show when the market is likely overstretched in the context of Bitcoin’s adoption curve growth and market cycles,” said analyst Philip Swift at the time, who devised the instrument in 2019.
The deadline is March 2020. For example, the COVID-19 fall was Bitcoin’s longest recent excursion below the 350DMA. So, but 2022 beat it by three months to two.
As a result, when it comes to GRM, the first three months of this year appear to be an outlier.
Another application for GRM is anticipating Bitcoin market cycle tops. Swift predicted that the next peak would be around three times the 350DMA in 2019.
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