Bitcoin Escape Top Indicator·Bottom Buy Signal Interpretation

The two-year MA multiplier indicator is designed to be used as a long-term investment tool, and it highlights the periods in which buying and selling Bitcoin will produce huge returns.

To do this, it uses the 2-year moving average (equivalent to the 730-day line, green line), and the 5-fold product of this moving average (red line).

Historically:

When the price falls below the 2-year moving average (green line), it is a bottom buy signal, and buying Bitcoin will produce excess returns.

When the price exceeds the 2-year moving average x5 (red line), it is a top sell signal, and selling Bitcoin will obtain greater returns.

Why is this the case?

As Bitcoin is adopted, it will go through bull and bear cycles, with excessive price increases due to excessive excitement among market participants;

Similarly, excessive price declines due to excessive pessimism among market participants. Identifying and understanding these periods can be beneficial to long-term investors. This tool is a simple and effective way to highlight these periods.