This article will introduce 12 cycle determination tools and exit indicators, most of which are less known. The following 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 2 times the 350 dMA price. In the past three cycles, when the 111 dMA breaks above 2 times the 350 dMA, it symbolizes the top of the Bitcoin/USD cycle. It is referred to as the PI Cycle Top because 350/111 = 3.153, which is not far from 3.142.
It is expected that this time may be different, as the expected crossover price will exceed $400,000 (which is difficult to achieve), but it can be anticipated that after Bitcoin reaches double the price of the 350 dMA (currently about $126,000), the final excitement phase will occur.
MVRV Z Score
Source: BiTBO
Another on-chain indicator emphasized before is the MVRV Z-Score, which is a tool for assessing extreme bubble periods. The MVRV Z-Score can help identify positions where Bitcoin may be significantly overvalued or undervalued relative to its fair value.
This indicator uses Bitcoin's market value (price x circulating supply) and its realized value (average price of Bitcoin during the last movement x circulating supply), and calculates the Z-Score between them to identify extremes.
Historically, Bitcoin/USD has formed cycle peaks within a few weeks after this ratio reaches a peak. It is expected that this round of the cycle will see this indicator reach at least 4; if it exceeds this level, it will be time to start researching other exit indicators.
A more interesting version of this indicator, which is less known, is the whale MVRV (holding 1,000 to 10,000 Bitcoins), see below:
Source: ChainExposed Data
VAPLI and Decay Oscillator
The Volatility Adjusted Power Law Index (VAPLI) indicator is built on the concept of power laws used to assess the deviation of Bitcoin prices from the fitted power law curve, adjusted for volatility to account for changes in market structure over time. Looking at the chart below, you can see that the period when this index pushes towards 100 and then turns and begins to decline aligns 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 following decay oscillator is modeled by Sminston With. The peaks of this oscillator have nearly locked in the tops of previous cycles within a few days, but there is clearly no way to determine in real-time where the peak will be reached: however, when this indicator reaches above 90%, and then looking at other exit signals, the likelihood of approaching your desired exit position is as high as 95%. Currently, this indicator is still below 60%, indicating that this market cycle is still in an upward phase:
Source: Bitcoin Good Fiat Bad
Mayer Multiple
The Mayer Multiple is the multiple of the price over the 200 dMA. While the chart above is helpful, standardizing it is actually more helpful considering volatility decreases over time. The following chart shows the adjusted Mayer Multiple indicator. It is far from 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 region:
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 realized value from market value. Then divide by market cap, with the formula: (Market Cap - Realized Market Cap) / Market Cap.
Source: BiTBO
This chart provides a visual understanding of market sentiment and the current market cycle phase. 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, you need to divide the days of destroyed Bitcoin by the existing Bitcoin supply and its circulating time. This is regarded as the 'transfer price,' and the transfer price is multiplied by 21.
The usage is straightforward, serving as a reference area, hoping to ensure positions are proportionally 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. When looking for exit signals, it is essential to pay more attention to other on-chain indicators that have been discussed.
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 extent of price deviation from that multiple. Historically, peaks have surpassed 4.5 times the 4-year MA, but when this multiple approaches 4, it is necessary to start paying attention to all other exit indicators:
Source: BiTBO
22-Day RSI
The 22-day RSI indicator is very useful; of course, a 2-week or monthly RSI can also be used, but the 22-day version is particularly clear for major inflection 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 the 22-day RSI of Bitcoin; when this indicator is above 90, you can exit your position within the following 3-6 weeks:
Source: TradingView
Coinbase / Phantom / Moonshot App Rankings
Currently, there is much supporting evidence related to the life cycle of cryptocurrencies; Coinbase's ranking in the 'All Apps' category is a clear signal indicating that we are at the peak time of the cycle.
Phantom and Moonshot can serve as potential signals. If Phantom ranks first among all apps, it will undoubtedly be an exit indicator. Generally, trends in the Coinbase App Store ranking peak and trough in the last few months of the cycle; when it ranks first among 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 you can follow bots like Coinbase App Store rankings for daily updates. Bitcoindata21 also provides regular updates with sentiment analysis.
Search Trends
Google Search Trends can be used to gauge market sentiment and understand what the public is interested in at any given moment, but most of the keywords people search for are very basic, 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 Value
This is a method of assessing market cycles monitored since 2020, which has been very helpful in tracking the peak of the mid-2021 cycle. If the expectation is for long-term growth in cryptocurrency, it is anticipated that market cap will grow comprehensively. Regardless of what the peaks are for the top 10, top 25, or top 100 tokens in the last cycle, this round of the cycle will surpass them before the peak arrives.
For example, in the last cycle, to enter the top 100 before the peak in November 2021, a market cap of about 1.2 billion USD was needed. Now, to enter the top 100 on Coinmarketcap, a market cap of 1.25 billion USD is required. This has slightly exceeded the peak of the previous cycle. Based on the overall market cap perspective, a conservative expectation is that before the cycle peak, the top 100 market cap should reach at least about 2 billion USD. Once this area is reached, it is undoubtedly time to start looking 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 a peak is expected. Nonetheless, historically, when the 3-month annualized basis exceeds 30%, the situation starts to become dangerous. This is because the bubble level of derivatives increases as it approaches the cycle peak (or even the mid-cycle peak) rather than decreasing.
Source: Velo Data
[Disclaimer] The market has risks, and investment should be done with caution. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this is at your own risk.
This article is authorized for reprint from: (PANews)
Original Author: Ostium, Cryptocurrency Analyst
'Understanding how to exit during a bull market! Telling you 12 cycle tools and exit indicators to help you seize the timing.' This article was first published in 'Crypto City.'
