Bitcoin's Price Is Up 43% in 7 Days as Bull Frenzy Grips Market

View With bitcoin's rise to 17-month highs, the Mayer multiple is teasing a break above 2.40 - a level that has marked the beginning of speculative bubbles in the past.

Bitcoin's surging price over the last week is reminiscent of the bull market frenzy observed a year and a half ago.

The leading cryptocurrency by market value rose to a 17-month high of $12,936 on Bitstamp earlier today.

Notably, with the near 90-degree rally to 17-month highs, the ratio of bitcoin's price to the 200-day price average - known as Mayer multiple - printed a high of 2.42, a level which was last seen in early January 2018.

The Mayer multiple essentially quantifies the spread between the price and the 200-day MA. An above-1.0 ratio indicates BTC is in bull market territory above the 200-day MA, while a reading below one implies the cryptocurrency is in a bear market below the 200-day MA. That said, over the years it has been observed that a reading above 2.4 signifies the beginning of a temporary speculative bubble - a self-feeding cycle of higher prices attracting more bids, leading to further rally.

The Mayer multiple rose above 2.4 on Mar. 4, 2013, when the price was trading at $36.00, representing 176 percent gains over lows near $13 seen in December 2012.

Further, prices rose from $11,000 to $20,000 in 16 days following the ratio's rise above 2.4 percent on Dec. 1, 2018.

Again, the bubble was short-lived, with prices falling to $12,000 on Dec. 22.

By Dec. 18 the price was trading at lows near $350. So, if history is a guide, then the fear of missing out may kick in once the Mayer multiple finds acceptance above 2.40, leading to further price rise toward the record high of $20,000.

While the case for a minor pullback is looking strong, the overall outlook will remain bullish as long as the price is held above the May 31 high of $9,097 and the cryptocurrency could chart another meteoric rise toward $20,000 if the Mayer multiple rises above 2.40.