Mastering Bitcoin Investment with the 2 YR MA Multiplier Tool
Today brought for the weekend, a very interesting onchain indicator, which I have already talked about on other occasions.
2 YR MA
The 2 YR MA multiplier is a bitcoin chart intended to be used as a long-term investment tool, but to identify precisely that; areas of possible positioning, thinking about that theoretical long term.
It highlights periods when buying or selling bitcoin during those times would have produced outsized returns.
To do this, use a moving average (MA) line, the 2-year MA, and also a multiplication of that moving average line, 2-year MA x5.
Note: the x5 multiplication is from the 2-year moving average price values, not your time period.
Buying bitcoin when the price falls below the 2-year MA (green line) has historically generated outsized returns. Selling bitcoin when the price rises above the 2yr MA x 5 (red line) has historically been effective for making profits.
Why does this happen?
As bitcoin is adopted, it moves through market cycles. These are created by periods when market participants are overexcited, causing the price to overextend, and periods when they are overly bearish when the price contracts excessively. Identifying and understanding these periods can be beneficial to the long-term investor. Or even a shorter term, but with upward entry zones, more than interesting.
This tool is a simple and effective way to highlight those periods.
Bitcoin price prediction using this tool?
The Bitcoin Investor tool can be used to indicate whether the price of bitcoin today is at historically low levels (in the green zone) or high (in the red zone) or neutral (between the green and red zones). Therefore, it is a useful tool for bitcoin price prediction, historically, as investors can understand on a historically relative basis whether in USD, BTC is currently overvalued or undervalued. This can be useful when forecasting the price of bitcoin.
If we look at the following graph, we will observe in addition to what has been mentioned, that I have drawn two areas, in 2015/2016 and in 2022/2023. Same movement for maybe, next movement also the same, upwards and with strength.
Be that as it may, we are in a more than possible, historical moment, with great adoption arriving and more, more people interested in bitcoin and its trading or… holding…
In the chart, the price of bitcoin was in November 2022 in areas of USD 16,000 and seemed to be preparing its next move.
We are seeing how even with the bad news that occurred from FTX and other bankrupt crypto companies, the bleeding of the crypto winter seemed to be about to end.
And if we rely on the onchain indicators, we only needed to confirm that the price was going to rise, because the technical situation is one of accumulation in the face of what could happen, perhaps, sooner rather than later, since, at a technical level, at the onchain level The RSI was also saying that we were very close to the moment desired by many… the end of crypto winter zone.
What happened a year later after the identification of this important support zone for bitcoin?
The price of bitcoin has moved from around $16,000 to the current $36,000 in one calendar year. With maximums USD of 38,000.
If you were to ask me what it will do next, I think that although in the long term it will rise, the chances of an unloading, of a bearish movement to make an LH (Low High) or ascending minimum, is quite high.
I update the 2 YR MA (Remember, the lower green line, because the red one, is 5 YR MA, a zone of great resistance in the history of bitcoin).
If you don’t know how to invest in crypto assets, as I always suggest, talk to your trusted financial advisor.