200-day moving average price multiple
- Green area: Market price of coin, in US$;
- Blue line: Ratio of green area divided by white line;
- White line: 200-day moving average of green area.
200-day moving average price multiple explained
As discussed, the 200-day moving average (200-day MA) is generally regarded as the long-term trend indicator for market price; if the price is trading above the 200-day MA its trend is bullish, below the 200-day MA its trend is bearish.
However, we can also apply a valuation multiple to this price action and filter out the daily noise, if we simply divide the day's current price by this 200-day MA. Typically, a multiple well above 1 indicates overvaluation, and a multiple well under 1 indicates undervaluation.