Reading Bitcoin's Long-Term Indicators: 200-Week Moving Average, Mayer Multiple and Pi Cycle

What long-term indicators do

Bitcoin has repeated big rallies and deep declines over multi-year spans, so several indicators have been built to gauge 'where in the cycle are we now'. Most measure the distance between price and a long moving average, look at the relationship between two moving averages, or measure how far price has fallen from its peak. They are all calculated from price alone, so rather than adding new information they summarize a long price record into a few numbers. Their use lies in describing how far today's price sits from long averages compared with the past record, not in telling you the date of a top or bottom. What the cycle narrative does and does not do is covered in the guide on what the cycle explanation does.

The 200-week moving average

The 200-week moving average is the simple average of 200 weekly closes. Two hundred weeks is about 3.8 years, close to the roughly four-year interval between bitcoin halvings. The multiple, price ÷ the 200-week line, below 1 means the price is below its average of nearly the past four years, and above 1 means it is that far above. It is often mentioned because in past deep declines price came down near this line, but there were also periods below it. Also check whether the 200-week line itself is rising and how much it changed over a few weeks. If the average is climbing steeply, the same multiple means something different a few months later. General properties of moving averages are in the guide on how to read moving averages.

The Mayer Multiple

The Mayer Multiple is price ÷ the 200-day simple moving average. The 200-day line is a long-term trend line widely used in stocks too, so the multiple shows how many times above or below its 200-day average the price is. For bitcoin, based on past cases, below 0.8 is often described as historically undervalued territory and above 2.4 as overheated. But those boundaries were chosen afterwards by looking at past tops and bottoms, so there is no guarantee they will matter in the same place next cycle. A useful reading is not whether a boundary was crossed but how rare today's value is in the whole past record. Looking at the distribution, how many days the value spent in each band, gives a sense of whether today's number is common or rare.

The Pi Cycle Top

The Pi Cycle Top compares the 111-day simple moving average with twice the 350-day simple moving average and marks days when the 111-day line crosses above. It is named because 350 ÷ 111 is about 3.15, close to pi. The short average exceeding twice the long one means price rose quickly over a short time, so it is cited as a sign of overheating. But measuring Binance daily candles with this site's Bitcoin Long-Term Indicators tool, a cross appeared near the April 2021 peak but not at the November 2021 peak of the same year. There was more than one top, and the indicator caught only one of them. That is why it is hard to hand a big decision to one indicator, and the absence of a cross does not mean there is no overheating.

Drawdown from peak and halving cycles

Drawdown from peak is the close ÷ the highest close up to that day − 1. Bitcoin has had several deep falls from its peaks in the past, so placing today's drawdown alongside the troughs of past declines shows how deep it is by comparison. A halving is when the issuance of new bitcoin is cut in half; halvings occurred on 28 November 2012, 9 July 2016, 11 May 2020 and 20 April 2024, and the next is estimated for around April 2028. Setting the price on halving day to 100 and overlaying cycles lets you compare how many days after a halving we are and how that differs from the same point in past cycles. But there are only three or four cycles to compare, and the mechanics of halvings are covered separately in the guide on how bitcoin halving works.

Common traps of long-term indicators

These indicators are easy to trust more than they deserve because of their catchy names and charts that seem to fit past tops and bottoms. Below are traps they share. In particular, remember that several indicators computed from the same price saying the same thing at once does not give you several independent pieces of evidence.

• Few samples: there have been only a few big cycles, so 'it always worked' means three or four cases
• Fitted after the fact: the periods (111, 350, 200) and boundaries (0.8, 2.4) were chosen by looking at past records
• Same ingredient: all are computed from price, so several agreeing does not add evidence
• Changing market structure: if participants and products (spot ETFs, derivatives) change, past relationships may not hold
• Data length: Binance records start in August 2017, so earlier cycles cannot be seen with this data

An order for reading them

When looking at long-term indicators, rather than drawing a conclusion from one number, it is better to go through them calmly in the same order each time. First, on a log-scale chart, see how far price is from the 200-week and 200-day lines. Next, check which band of the past distribution the Mayer Multiple is in and how close the Pi Cycle is. Then compare the drawdown from peak with the troughs of past declines and overlay the days since the halving with the same point in past cycles. Finally, rather than noting what happened after these numbers were last similar, write down what is different now from the past. Why long-term charts are viewed on a log scale is explained in the guide on log versus linear charts.

Using the tools on this site

This site's Bitcoin Long-Term Indicators tool uses Binance BTCUSDT daily and weekly candles to show, on one screen, the 200-week moving average and its multiple, the Mayer Multiple (reference lines 0.8, 1.0 and 2.4 and a band distribution table), Pi Cycle Top cross dates and proximity, drawdown from peak with a table of declines of 20% or more, and a cycle comparison with halving day set to 100. Bitcoin Monthly Returns shows each month's record as a heatmap, and Crypto Cycle Compass combines several indicators to describe the current phase. All three only show where today's numbers sit in the past record; none forecasts the next move.

Limits and disclaimer

Long-term indicators summarize the past price record, and there is no guarantee that relationships drawn from only a few cycles will continue. Moving average values can differ slightly by exchange and data start date, and the next halving date is an estimate that depends on block production speed. This guide explains how to calculate and read bitcoin's long-term indicators. It does not tell you when to trade, does not recommend trading any asset and is not investment advice.