Bitcoin data indicators are helpful for us to observe the price of Bitcoin, especially for long-term spot traders. This article mainly introduces the data sources and calculation methods of some commonly used Bitcoin indices.
1. Fear & Greed Index:
Investor sentiment changes with market fluctuations. Extreme fear indicates that investors are too worried, which may be a buying opportunity. Excessive greed indicates that investors are too excited, and the market may adjust. The Fear & Greed Index quantifies investor sentiment from 0 to 100. The lower the value, the more panic, and vice versa. The data source of the Fear & Greed Index comes from five different indicators.
Volatility (25%): Gets Bitcoin’s current volatility and maximum value and compares it to the corresponding averages of the last 30 and 90 days.
Market Momentum/Volume (25%): Current volume and market momentum (compared to the last 30/90 day averages) and puts these two values together.
Social Media (15%): Collect and count posts on various hashtags for each token on Reddit and Twitter and check their reception rate and number of interactions in a specific time frame.
Market Survey (15%): A cryptocurrency poll is conducted every week on the polling platform strawpoll.com and people are asked how they view the market.
Dominance (10%): Dominance is similar to the market capitalization share of the entire cryptocurrency market.
Google Trends (10%): Extracts Google Trends data for various Bitcoin-related search keywords and crunches these numbers, particularly changes in search volume and recommendations for other currently popular searches, to use in the index.
Data source: https://www.coinglass.com/zh/pro/i/FearGreedIndex
2. ahr999 Hoarding Index (Nine Gods Dip Index)
This indicator was created by ahr999, an ancient coin hoarder, to assist Bitcoin fixed investment users in making investment decisions based on timing strategies. This indicator implies the rate of return of short-term Bitcoin fixed investment and the deviation of Bitcoin price from expected valuation.
When the ahr999 index < 0.45, you can buy at the bottom;
When ahr999 is between 0.45-1.2, it is suitable for fixed investment;
When ahr999 >1.2, the currency price is already relatively high and is not suitable for operation.
From a long-term perspective, the price of Bitcoin shows a certain positive correlation with the block height. At the same time, with the advantages of the fixed investment method, users can control the short-term fixed investment costs so that most of them are below the price of Bitcoin.
Data source: https://www.feixiaohao.com/data/ahrdata.html
3. Retracement from the highest point
The retracement range of BTC price from the highest point of the bull market.
-25%: Indicates that the market has entered a period of doubt.
-50%: Indicates that the market has entered a period of anxiety.
-75%: Indicates that the market has entered a period of despair.
Based on historical prices, below -75% is often the bottom of the cycle.
Data source: https://studio.glassnode.com/metrics?a=BTC&m=market.PriceDrawdownRelative
4. Bitcoin Rainbow Chart
The Rainbow Chart is a long-term valuation tool for Bitcoin. It uses a logarithmic growth curve to predict the potential future price direction of Bitcoin.
It overlays a rainbow colored band on top of a logarithmic growth curve channel, attempting to highlight the market sentiment of each rainbow colored phase as price passes through it. Therefore highlighting potential buy and sell opportunities.
The warmer colors above the rainbow chart show that the market may be overheated and a good time to sell.
The cooler colors at the bottom of the rainbow chart show low market sentiment and are good times to buy.
Data source: https://www.coinglass.com/zh/pro/i/bitcoin-rainbow-chart
5. Two-year MA multiplier indicator
The indicator uses a 2-year moving average (730-day equivalent, green line) and a 5-fold product of that moving average (red line).
When the price falls below the 2-year moving average (green line), it is a dip buying signal and buying Bitcoin will generate excess returns.
When the price exceeds the 2-year moving average x5 (red line), it is a sell signal to escape the top, and selling Bitcoin will generate greater profits.
Why does this happen? As Bitcoin is adopted, it will go through bull and bear cycles, with prices rising too high due to excessive excitement from market participants, and falling too low due to excessive pessimism from market participants.
Data source: https://www.coinglass.com/zh/pro/i/MA
6. 200-week moving average heat map
Historically, during each major market cycle, Bitcoin’s price has bottomed near its 200-week moving average.
This indicator uses a colored heatmap of percentage growth based on a 200-week moving average.
A color is assigned to the price chart based on the month-over-month percentage increase of the 200-week moving average.
Data source: https://www.coinglass.com/zh/pro/i/200WMA
Continuously update. If you find it helpful, you can follow me. I will update the latest values of different indicators from time to time. I hope it will help you judge the price of BTC.
