Three data points say ... we never exited the bull market, though $BTC is relatively expensive.

Let's break this down, starting with $BTC and the 20 /40 rule.

There's quite a bit to unpack here.

First up, as long as $BTC is above the SMA 200 (red line), we're in a crypto bull market.

Next, it's relatively over valued.

The basic idea is that for an asset with the volatility level of $BTC, if its price rises too far above the SMA 200, it typically corrects. At 40% above it definitely corrects. We are some 26% above right now.

That said, a quick check of the $BTC 25 Delta Options skew shows that we're fine.

If that orange line (the options skew) rises 10% above or drops below -10% of the mean (so above 1.1 or below .9) $BTC’s price tends to revert.

We're currently at -0.71, which means no reason to think a decline is coming.

$ETH also follows the 20 - 40 rule given its volatility profile.

Its price is presently ~18% above the SMA 200. That means it's relatively better positioned using this technical approach to price valuation.

If you check $SOL, you'll find a similar story.

Concluding Thoughts

We're still in a bull market and $BTC isn't too highly priced. Options data even suggests that we're in no imminent threat of decline.

But using the 20 / 40 rule, we can see that other coins are much better valued -- even among the majors such as $ETH and $SOL.

Happy Trading!

-Sebastian Purcell, PhD

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