Mayer Multiple calculation

The Mayer Multiple is a ratio used to evaluate the price of Bitcoin in relation to its historical performance. It is calculated by dividing the current price of Bitcoin by the 200-day moving average (200 DMA) of its price:

\[ \text{Mayer Multiple} = \frac{\text{Current Price}}{\text{200 DMA}} \]

The logic for using the Mayer Multiple in trading decisions is simple:

  • If the Mayer Multiple is greater than 2.4, it signals that Bitcoin is overbought and a potential sell signal.
  • If the Mayer Multiple is less than 1.0, it indicates that Bitcoin is underbought and might be a good opportunity to buy.
  • Otherwise, it suggests holding the position.

Create a function calculate_mayer_multiple(bitcoin_price, dma_200) to calculate the Mayer Multiple given the current price of Bitcoin and the 200-day moving average. Your function should:

  • Receive the current price of Bitcoin and the 200-day moving average as arguments.
  • Calculate the Mayer Multiple using the formula provided.
  • Return the Mayer Multiple.

Then, create three functions to determine the trading decision based on the Mayer Multiple:

  • sell_signal(mayer_multiple): Returns True if the Mayer Multiple is greater than 2.4.
  • buy_signal(mayer_multiple): Returns True if the Mayer Multiple is less than 1.0.
  • hold_signal(mayer_multiple): Returns True if the Mayer Multiple is between 1.0 and 2.4.

Test your functions with different values to ensure they are working correctly.