How to Use the Sentiment Cycle Indicator to Detect Trend ShiftsHow to Use the Sentiment Cycle Indicator to Detect Trend Shifts in BTC
Chart: BTC/USDT (1D)
Tool Used: Sentiment Cycle Indicator
Type: Educational – How to interpret sentiment shifts and time corrections.
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🟢 What the Indicator Does:
The Sentiment Cycle Indicator is designed to help identify emotional cycles in price movements by mapping bullish (green) and bearish (red) sentiment zones directly on the chart background.
It highlights sentiment clusters using a combination of volume behavior, price structure, and trend alignment , helping traders anticipate trend continuation or possible exhaustion.
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✅ Recent Performance:
📈 In the most recent BTC rally (from ~60,000 to 110,000+ USDT),
• The indicator captured the uptrend early, turning the background consistently green starting mid-October 2024.
• Multiple Buy signals (green arrows) confirmed trend conviction.
• Even during minor pullbacks, green sentiment persisted — signaling strength.
📉 Now, the green sentiment zone has faded, and red zones are reappearing, indicating a potential sentiment shift:
• This transition may be an early warning of correction or distribution phase.
• Several Sell signals (red arrows) have recently fired as well, validating the shift.
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🔍 Current Interpretation:
• Bullish sentiment has weakened — background color has turned neutral-to-red.
• Sentiment exhaustion is likely, and this could mark the start of a distribution or corrective phase.
• The absence of new buy signals despite recent price highs further supports this view.
📌 What to watch next:
• If red zones deepen and persist → correction is likely.
• If green zones reappear quickly with renewed Buy signals → resumption of uptrend is possible.
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📚 How-To Use the Indicator:
1. Watch the background color:
• Green → Accumulation or markup.
• Red → Distribution or markdown.
2. Buy/Sell Markers:
• Use arrows as confirmation — not standalone signals.
• Best results when aligned with sentiment zone and price structure.
3. Volatility Filter:
• Sideways zones (mixed bands) indicate indecision — avoid overtrading here.
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🧠 Final Thoughts:
The Sentiment Cycle Indicator isn’t just about price – it’s about the emotion behind price. As BTC shows signs of sentiment fading, this could be a pivotal time to re-evaluate bullish bias and prepare for a cooling phase or even deeper correction.
Let the market’s mood guide your strategy.
