The graph below shows the 200 daily simple moving average (200d SMA) and the associated Mayer Multiple. A simple moving average takes the average of all the prices in a list.
As an example, let's take the 3 day moving average for the following prices: 250, 320, 280. The daily moving average would be: (250 + 320 + 280) / 3 = 283.33
Similarly, the 200d SMA will take the daily closing prices of the last 200 days and return the average.
The Mayer Multiple is simply the ratio between the current daily price and the 200d SMA. It will usually return a number between 0.6 and 4, where 0.6 indicates a price far below the 200d SMA (i.e. the market is oversold) and 4 a price far above the 200d SMA (i.e. the market is overbought). These indicators can be used to buy or sell bitcoin.
The 200d SMA is a great indicator for the trend of the Bitcoin price. When the price of Bitcoin is less than the 200d SMA, this indicates a bearish trend. When the bitcoin price crosses the 200d SMA, we see a trend change (either from bearish to bullish or the other way around). A bitcoin price greater than the 200d SMA indicates a bullish trend.
The Mayer Multiple (MM) is an extension of the 200d SMA as it indicates a ratio. We can generally assume the following trends: