Ethereum multiplier is approaching the critical buy point

Ethereum has reached a critical point that could signal the formation of a market bottom. Crypto analyst Ted noted a key pattern on social media platform X: the last two Ethereum price decline cycles coincided with the multiplier dropping below 0.5. Currently, this indicator stands at 0.56, indicating an approach to this critical threshold. At the same time, Ethereum is trading at $2.03K, giving market participants an opportunity to closely monitor the situation.

What is the multiplier and how does it work

The Mayer multiplier is a technical tool used by traders to determine the fair value of cryptocurrencies. This indicator is based on comparing the current market price of an asset with its 200-day moving average. When the multiplier falls below 0.5, it suggests that the price is significantly below the long-term average, which has historically coincided with the most advantageous entry points into the market.

Historical patterns and current situation

History shows a clear correlation between the multiplier dropping and the formation of market bottoms. In both previous cycles, Ethereum’s bottom occurred precisely when the multiplier fell into the critical zone below 0.5. This makes the current level of 0.56 particularly important to watch. If the multiplier continues to decline, it could serve as a signal to reevaluate Ethereum’s market valuation.

Why professionals are watching this multiplier

Investors and traders pay close attention to the dynamics of this indicator because it has proven to be a reliable signal for market entry opportunities. The Mayer multiplier provides an objective way to determine whether an asset is oversold and helps make informed decisions about potential purchases. The current approach of the multiplier to the critical zone again draws attention to this important technical analysis tool.