Block Subsidy and Mayer Multiple models can help accurately price Bitcoin (BTC).
The Block Subsidy model shows that Bitcoin is above the 16x Thermocap line.
The Mayer Multiple model suggests the BTC price is undervalued relative to its moving averages.
Previous Bitcoin market cycles have had similarities, some of them being the price’s relation to its long-term moving average and its thermocap.
The Block Subsidy and Mayer Multiple models better visualize whether the price is over or undersold relative to these indicators.
Let’s look at readings from these two models and attempt to determine when the Bitcoin market cycle will end.
Block Subsidy Model
The Block Subsidy Model estimates Bitcoin’s value by comparing its price to the cumulative cost of mining all Bitcoin, known as the Thermocap.
Historically, Bitcoin’s prices at the end of bearish trends have been around twice the Thermocap. This means Bitcoin’s market price is barely higher than its cost of production.
This all changed at the peak when Bitcoin reached up to 64 times the Thermocap, noting the market price way higher than its cost of production.
In the 2013 and 2017 highs, the BTC price briefly moved above 64x Thermocap line (black circles). On the other hand, it did not reach it in the 2021 high, peaking above the 32x Thermocap line (purple).
Block Subsidy Model | Credit: Valdrin Tahiri/Glassnode
In the current cycle, Bitcoin has only moved above the 16x Thermocap line (yellow). This suggests that the cycle has not reached its top yet.
An interesting movement is that the price risks falling below the 16x line. In both previous cycles, Bitcoin returned below this line before resuming its upward trend.
The Mayer Multiple is an indicator that compares Bitcoin’s price to its 200-day moving average (MA) to assess overbought and oversold conditions.
Historically, a Mayer Multiple of 2.4 indicates overbought conditions, while 0.8 signals oversold conditions. These values are used alongside the 200-day MA to estimate potential cycle tops and bottoms for Bitcoin’s price.
In the previous market cycles, the Mayer Multiple increased well above 2.4. It did so twice between 2019 and 2021 (black circles).
On the contrary, the indicator has topped at 1.77 in the current Bitcoin cycle. This aligns with the block subsidy model, which suggests the price has not topped yet.
Mayer Multiple | Credit: Valdrin Tahiri/Glassnode
The interesting aspect of the Mayer Multiple model is that it gives a current reading of 1.02 (green circle). This is an oversold value, which has historically been associated with bottoms.
So, the Mayer Multiple model not only suggests the price has not topped yet, it instead says that a local bottom has been reached and a significant rally can occur soon.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
