Today, Bitcoin (BTC) has once again set a new historical high, breaking through $107,793. This breakthrough has not only attracted the attention of global investors but also filled the market with expectations for the future of cryptocurrency. Behind this historic price breakthrough lies a complex and subtle cyclical change in the crypto market, and the right tools to predict these cycles have become key for investors to succeed in a volatile market.

In the crazed bull market of cryptocurrencies, knowing when to enter and exit is key to profit. Cycle tools and retracement indicators act like a 'navigation system' for the market, helping us maintain direction amid severe fluctuations. These tools can provide investors with unique perspectives, revealing cyclical trends in Bitcoin and other crypto assets, and capturing market turning points in advance.

Whether you are an experienced veteran or a newcomer to crypto, mastering these tools can help you find your footing in the market's fluctuations.

This article will delve into 12 key cycle tools and exit indicators, many of which are lesser-known but highly potential hidden treasures. From the PI cycle to the 3-month annualized basis, these tools not only help predict the peaks and troughs of the market but also guide you to the correct 'exit route' before the market frenzy arrives.

Cyclical judgment tools

PI Cycle

The PI cycle top indicator has performed excellently in the past several cycles, successfully capturing the tops of Bitcoin cycles. This indicator uses the 111-day moving average (111 dMA) and the price of 2 times the 350-day moving average (350 dMA) for judgment. When the 111 dMA breaks above the 2 times 350 dMA, it usually indicates that the BTC/USD cycle top is approaching. This indicator is referred to as the 'PI cycle top' because 350 divided by 111 is approximately 3.153, very close to the circumference ratio 3.142.

Although the current predicted crossover price may exceed expectations, even reaching $400,000 (which may be somewhat unrealistic), it is worth noting that after Bitcoin prices break the level of 2 times the 350 dMA (currently around $126,000), it may welcome the final wave of 'excitement phase.'

4-year MA multiple

The 4-year MA multiple is a simple and effective cycle determination tool. It judges market conditions by plotting the 4-year moving average (MA) of Bitcoin prices and calculating the multiple of price deviation from that average. Historically, when the price deviates from the 4-year MA by more than 4.5 times, the market is close to the top, hence special attention is needed.

When this multiple approaches 4, it indicates that the market may have entered a mature stage, and investors should start paying attention to all other exit signals. When used in conjunction with other indicators, the 4-year MA multiple can serve as a strong warning signal, indicating we are about to enter the market top area.

Mayer Multiple

Mayer Multiple is based on the ratio of the 200-day moving average (200 dMA) to the current Bitcoin price. This indicator helps us determine whether Bitcoin is in an overbought state. Although the Mayer Multiple itself is already very useful, combining it with volatility allows us to better understand whether the market is in a heated state.

Currently, the Mayer Multiple relative to the 200-day moving average level is far below historical highs, and it has not even returned to the level of March 2024. Therefore, investors need to closely monitor this indicator, especially when it breaks historical highs, as it may signal new market adjustment.

On-chain data analysis

MVRV Z Score

MVRV Z-Score is another important on-chain indicator, primarily used to measure whether Bitcoin is in a bubble state. By comparing Bitcoin's market value (price multiplied by circulating supply) with its actual value (the last transaction price of each Bitcoin multiplied by circulating supply), this indicator helps us identify extreme overvaluation or undervaluation relative to Bitcoin's fair value.

From historical data, whenever the MVRV Z-Score peaks, BTC/USD usually peaks in the following weeks. Therefore, if this indicator breaks 4 or exceeds this level, it means that the cycle top may not be far away, and at this time, attention should be paid to other exit signals.

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NUPL (Net Unrealized Profit/Loss)

NUPL measures unrealized profits or losses in the market by comparing market value with realized value. The formula is: (Market Value - Realized Market Value) / Market Value. This indicator provides us with a strong reference regarding market sentiment, helping us judge whether the market is in a bubble phase.

From historical data, when NUPL approaches or exceeds 75%, it usually indicates that the cycle top is approaching.

This indicator is particularly important when market sentiment is volatile, as it helps investors understand whether they have entered an overly optimistic phase and reminds us to pay attention to the upcoming market adjustments.

Terminal Price

The Terminal Price is an indicator proposed by analyst Checkmate, used to predict Bitcoin's 'transfer price.' This indicator is calculated by dividing the days to destroy Bitcoin by the existing Bitcoin supply and its circulation time.

This 'transfer price' often helps investors decide on the best exit timing.

Currently, the Terminal Price is around $180,000. While this does not mean we need to wait until $180,000 to start selling, investors should pay attention to other exit signals as they approach this price. It is not an indicator to rely on alone but should be used in conjunction with other on-chain indicators to help confirm the best market exit points.

Market sentiment volatility

VAPLI and Decay Oscillator

VAPLI (Volatility Adjusted Power Law Index) is a tool based on the power law concept, used to measure the deviation between Bitcoin prices and the fitted power law curve, adjusted for volatility. This helps us understand changes in market structure.

The value of this indicator has previously exceeded 100, and after the breakthrough, it usually coincides with the timing of the cycle top formation.

The Decay Oscillator is a tool more focused on cycle tops. It is modeled by Sminston With to detect the periodic patterns of Bitcoin price fluctuations. When this indicator reaches over 90%, it usually means that the cycle top is approaching, although it cannot precisely predict the peak's location.

Currently, this indicator is still below 60%, indicating that the market is in an upward phase, but if it breaks through 90%, it can serve as a strong exit signal.

3-month annualized basis

The 3-month annualized basis is an indicator that measures the bubble in the derivatives market. Although it cannot directly predict the cycle top, it can help investors identify potential risk escalation timings. When the annualized basis exceeds 30%, it usually indicates that the derivatives market has entered an excessive speculation phase, increasing market risk.

When the basis rises significantly, investors should cautiously adjust their positions and reduce risk, rather than waiting for the exact arrival of the cycle top.

Historical data shows that the bubble degree of the derivatives market usually peaks at the end of the cycle, followed by the possibility of market adjustments.

22-day RSI (Relative Strength Index)

The 22-day RSI is a very useful short-term indicator, especially crucial for judging major turning points. Although 2-week or monthly RSIs can also be used, the 22-day RSI is very clear for capturing the peaks of cyclical fluctuations.

Whenever the 22-day RSI reaches above 90, Bitcoin typically peaks in the following weeks. In this case, investors can consider gradually exiting their positions in the subsequent 3 to 6 weeks. It is important to note that historically, this RSI peak has a close relationship with the cycle top, especially after significant increases, as a sharp rise in RSI often signals market overheating.


Application rankings

Now, much supporting evidence related to the cryptocurrency lifecycle appears in the rankings of some popular applications. Particularly, Coinbase, whose ranking in the App Store often reflects market sentiment. When Coinbase's app ranks at the top of all applications, it usually indicates that the market is close to the cycle's top.

Phantom and Moonshot are also potential signals. When these applications rank first in the App Store, it usually indicates that the market is nearing its peak. This trend generally appears in the last few months of the cycle, and investors can use these signals in conjunction with other cyclical indicators to judge exit timing.

To maintain real-time updates, tools like AppFigures can be used to monitor Coinbase App Store rankings, or platforms like Bitcoindata21 can provide regular updates with sentiment analysis.

Search trends

Google search trends are another way to understand market sentiment. By analyzing changes in search keywords, investors can identify changes in public interest in cryptocurrencies. It is worth noting that common keywords like 'Bitcoin' or 'cryptocurrency' are not always effective signals. More specific search terms like 'BINANCE LOGIN', 'CHEAPEST CRYPTO', or 'BUY CRYPTO' can provide more precise insights into market sentiment.

When these specific search keywords frequently appear in search engines, it often indicates that the public's interest in cryptocurrencies has peaked, and the market may be close to its peak. By combining these trends with other technical indicators, investors can better judge the timing for exit.

TOP X Market Capitalization

Since 2020, the TOP X market capitalization method has been used to evaluate cryptocurrency market cycles, especially excelling in tracking the 2021 cycle peak. Based on market capitalization changes, investors can determine which tokens have entered the mainstream of the market and predict the likelihood of market capitalization growth in the coming months.

At the cycle peak in November 2021, the market capitalization required to enter the top 100 was about $1.2 billion, while now it is close to $1.25 billion to enter the top 100 on CoinMarketCap. As the market continues to expand, it is expected that the market capitalization of the top 100 will further increase. If the market capitalization reaches about $2 billion, this may signal that the cycle is nearing its top, and at that time, one should start considering finding exit opportunities.

Practical application recommendations

When practically applying these tools and indicators, traders need not only to choose the appropriate tools but also to combine them according to their personal trading strategies. Each cyclical tool and exit indicator has its unique advantages, but to succeed in the market, how to efficiently combine these tools is particularly important. Effective combinations can help you accurately capture market trends and reversal signals, leading to more scientific decision-making.

When choosing tools that suit your trading strategy, do not overly rely on a single tool:

The combination of RSI and MVRV Z-Score can help you more comprehensively assess the market's overbought or oversold state, while the PI cycle top and Mayer Multiple can provide more long-term valuable reference indicators.

Changes in the market environment should also be considered when selecting tools. For example, in a strong market, short-term RSI and Decay Oscillator may be more effective, while in a choppy market, long-cycle MVRV Z-Score and 4-year MA multiple may be more forward-looking.

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In the cryptocurrency market, the correct use of cycle tools and retracement indicators is key to accurately capturing market opportunities. Each tool has its unique functions and application scenarios, helping traders better judge market tops and bottoms, and identify the timing of trend reversals. However, the effectiveness of the tools is not solely dependent on the tools themselves, but is closely related to the market environment and trading strategy.

By reasonably combining and using cycle tools and retracement indicators, traders can achieve a more scientific market prediction. The interactivity with the market requires traders to remain flexible when using tools and avoid blindly relying on any single tool. Understanding the advantages and limitations of these tools can allow traders to stay sharp in a rapidly changing market and make more informed investment decisions.