What is Bitcoin Pi Cycle Top Indicator?Hi folks,
🎯In this content, we will explore the Bitcoin Pi Cycle Top Indicator and how it can be used.
🎯The Pi Cycle Top Indicator has historically been effective in picking out the timing of market cycle highs to within 3 days. It uses the 111 day moving average (111DMA) and a newly created multiple of the 350-day moving average, the 350DMA x 2. Note: The multiple is of the price values of the 350DMA, not the number of days.
🎯For the past three market cycles, when the 111DMA moves up and crosses the 350DMA x 2 we see that it coincides with the price of Bitcoin peaking. It is also interesting to note that 350 / 111 is 3.153, which is very close to Pi = 3.142. In fact, it is the closest we can get to Pi when dividing 350 by another whole number. This once again demonstrates the cyclical nature of Bitcoin price action over long time frames. However, in this instance, it does so with a high degree of accuracy over the past 7 years.
🎯Let's take a look at how the Pi Cycle Top, which helps us find the previous peak of Bitcoin, has performed in the past.
📌Yellow Trend --> 111DMA Green Trend --> 350DMA
📌As of April 2021, our indicator intersected with the 111DMA and 350DMA, and a peak signal was given at 63K. Bitcoin, then experienced a deep sell-off, falling to 29,000.
📌However, there are two important points to note. Whenever Bitcoin's price movement falls below the 111DMA, it has been exposed to selling pressure. In addition, whenever it manages to maintain a sustained move above the 111DMA, a rise called a "relief rally" begins.
📌So, when did the bull come, or when will it come? Whenever we witness Bitcoin's price above the 350DMA, for example, in December 2020, a serious bull run begins (you can also check previous periods). With the movement starting in December 2020, Bitcoin has experienced over 250% rise.
🎯Neither on-chain data nor technical data alone is sufficient to understand the price movement of any product. However, if we correctly interpret the indicator mentioned here, we can reduce our risk ratio.
See you in the next informative content.👋🏻👋🏻
