This article will introduce 12 cycle determination tools and exit indicators, most of which are little known. Here are the details:
PI Cycle
Source: BiTBO
The PI Cycle Top Indicator has successfully captured the tops of the first three cycles. This indicator uses the 111-day moving average (dMA) and the 2x 350 dMA price. In the past three cycles, when the 111 dMA breaks above the 2x 350 dMA, it symbolizes the top of the Bitcoin/USD cycle. It is called the PI cycle top because 350/111 = 3.153, which is not far from 3.142.
It is anticipated that this time may be different as the expected crossover price will exceed $400,000 (which is difficult to achieve), but it can be expected that after Bitcoin reaches twice the 350 dMA price (currently about $126,000), a final excitement phase will occur.
MVRV Z Score
Source: BiTBO
Another on-chain indicator emphasized earlier is the MVRV Z-Score, which is a tool for assessing extreme bubble periods. The MVRV Z-Score helps identify the position of Bitcoin relative to fair value and whether it may be overvalued or undervalued to an extreme degree.
This indicator uses Bitcoin's market value (price x circulating supply) and realized value (the average price of the last movement of each Bitcoin x circulating supply), and calculates the Z-Score between them to identify extremes.
Historically, Bitcoin/USD has formed a cycle peak within weeks after this ratio reaches its peak. It is expected that this cycle will have this indicator reach at least 4; if it exceeds this level, research on other exit indicators can begin.
A more interesting version of this indicator, which is less known, is the whale MVRV (holding 1,000 to 10,000 Bitcoins), as shown in the following chart:
Source: ChainExposed Data
VAPLI and Decay Oscillator
The Volatility Adjusted Power Law Index (VAPLI) indicator is based on the concept of power laws, used to assess the deviation of Bitcoin prices from the fitted power law curve and adjusted for volatility to account for market structure changes over time. Looking at the chart below, it can be seen that the period when the index pushed towards 100 and then turned around and began to decline coincides with the cycle top. Currently, this number has once again broken through 100.
Source: Bitcoin Good Fiat Bad Data
Similar to the volatility-adjusted power law, the decay oscillator below is modeled by Sminston With. The peaks of this oscillator nearly locked in the tops of previous cycles within days, but there is no way to truly determine where the peak will be in real time: however, when this indicator reaches above 90%, then looking at other exit signals, the likelihood of approaching your desired exit position is 95%. Currently, this indicator is still below 60%, indicating that this market cycle is still in the upward phase:
Source: Bitcoin Good Fiat Bad
Mayer Multiple
The Mayer Multiple is a multiple of the 200 dMA when trading prices. Although the chart above is helpful, standardizing it is actually more beneficial as volatility decreases over time. The chart below shows the adjusted Mayer Multiple indicator. It is still far from reaching the historical peak relative to the 200 dMA; in fact, it hasn't even returned to the peak in March 2024. Looking forward to surpassing the peak in March 2024, moving towards the 0.9 area:
Source: TradingView Data
NUPL
NUPL, or Net Unrealized Profit/Loss, uses market value and realized value (as emphasized in the MVRV Z Score section above), subtracting the realized value from the market value. Then, it is divided by the market cap, with the formula: (Market Cap - Realized Market Cap) / Market Cap.
Source: BiTBO
This chart provides an intuitive understanding of market sentiment and the current phase of the market cycle. Historically, when it approaches or exceeds 75%, the cycle top is not far away.
Terminal Price
Terminal Price is a tool created by analyst Checkmate. To calculate this indicator, the number of days Bitcoin has been destroyed is divided by the existing Bitcoin supply and its circulating time. This is seen as the 'transfer price', and the transfer price is multiplied by 21.
The method of use is simple, serving as a reference area, hoping to ensure that positions are proportionately adjusted—currently, its price is $180,000. This does not mean waiting until $180,000 to exit any long-term exposure, but rather using it in conjunction with all other exit indicators. Greater emphasis should be placed on the other on-chain indicators already discussed when looking for exit signals.
Source: Bitcoin Magazine Pro
4-Year MA Multiple
The 4-Year MA Multiple is very simple: plot the 4-year moving average and calculate the degree to which the price deviates from this multiple. Historically, peaks have exceeded 4.5 times the 4-Year MA, but when this multiple approaches 4, all other exit indicators should start to be monitored:
Source: BiTBO
22-Day RSI
The 22-day RSI indicator is very useful; of course, you can also use the 2-week or monthly RSI, but the 22-day is especially clear for major turning points. In fact, every time the 22-day RSI reaches a peak above 90, the cycle peak forms within the following 22 days (excluding the peak on November 21).
You can refer to Bitcoin's 22-day RSI; when this indicator is above 90, exits can be made within the following 3-6 weeks:
Source: TradingView
Coinbase / Phantom / Moonshot App Rankings
Currently, there is much supporting evidence related to the cryptocurrency lifecycle; the Coinbase app store ranking at number one among 'all applications' is a clear signal indicating that it is at the peak time of the cycle.
Phantom and Moonshot can serve as potential signals. Phantom ranking first in all apps will be an unquestionable exit indicator. Typically, the Coinbase App Store ranking trend peaks and troughs in the last few months of the cycle, and when it ranks first in all apps, a major top often appears in less than 4 weeks. This indicator also needs to be used in conjunction with other indicators.
You can use AppFigures for real-time tracking, or follow bots for daily updates, such as tracking Coinbase app store rankings. Bitcoindata21 also provides periodic updates with sentiment analysis.
Search Trends
Google Trends can be used to assess market sentiment and understand what the public is interested in at any given moment, but most of the keywords people search are very superficial, such as 'Bitcoin' or 'cryptocurrency'. You need to be more specific to really get some signals. For example: keywords like BINANCE LOGIN, CHEAPEST CRYPTO, CRYPTO APP, COINMARKETCAP, BUY CRYPTO, CRYPTO PRICES, etc.
TOP X Market Cap
This is a method of assessing the market cycle that has been monitored since 2020, which is very helpful in tracking the peaks of the mid-2021 cycle. If the expectation is for long-term growth in cryptocurrency, then it is anticipated that market cap will grow comprehensively. Regardless of what the peak is for the top 10, top 25, or top 100 tokens in the last cycle, this cycle will exceed those peaks before the peak arrives.
For example, in the last cycle, entering the top 100 before the peak in November 2021 required a market cap of about $1.2 billion. Now, to enter the top 100 on Coinmarketcap, a market cap of $1.25 billion is needed. It has slightly exceeded the peak of the previous cycle. Based on the total market cap perspective, a conservative expectation is that before the cycle peak, the market cap of the top 100 should reach at least about $2 billion. Once this area is reached, there should be no doubt about starting to look for exit opportunities.
3-Month Annualized Basis
The 3-month annualized basis is just a quick way to understand the bubble in the derivatives market; however, it is more helpful in emphasizing when to cautiously reduce risk rather than completely exiting the spot portfolio when anticipating a cycle peak. Nevertheless, historically, when the 3-month annualized basis exceeds 30%, the situation starts to become dangerous. This is because the bubble in derivatives tends to increase as it approaches the cycle peak (or even the mid-cycle peak) rather than decrease.
Source: Velo Data
[Disclaimer] The market is risky, and investment should be approached with caution. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions herein align with their specific circumstances. Any investments made based on this are at their own risk.
This article is authorized for reproduction from: (PANews)
Original author: Ostium, Crypto Analyst
‘In a bull market, understand when to exit! Here are 12 cycle tools and exit indicators to help you seize the moment.’ This article was originally published in 'Crypto City'.
