15 Key Indicators for Timing the Exit of a Bitcoin Bull Market
Source: Talking about Li and Talking about Outside
In an article back in December 2022, we helped everyone summarize 10 Bitcoin indicators and believed that we had entered the later stage of the bear market at that time, which was also a good time to start dollar-cost averaging. As shown in the figure below.
Unknowingly, two years have passed, and we have finally welcomed the long-awaited new bull market.
Although it is said that the bear market does not speak of a bottom and the bull market does not speak of a peak, many people seem to like to try to find some answers to this question. Therefore, with a research mindset, this issue we will simply share 15 Bitcoin peak escape reference indicators.
Indicator 1: Rainbow Price Chart Indicator
As a long-term value assessment tool for Bitcoin, the Rainbow Chart Indicator should be quite familiar to everyone, at least you should have heard of it. This indicator uses a logarithmic growth curve to predict the potential price direction of Bitcoin in the future. It overlays rainbow-colored bands on the top of the logarithmic growth curve channel to highlight the market sentiment at each rainbow color stage as Bitcoin's price moves. The suggested peak escape position can be chosen between the yellow and red areas. As shown in the figure below.
Indicator 2: Terminal Price
Historically, this indicator has been quite effective in predicting the tops of Bitcoin price cycles. For example, during the bull market peak in November-December 2017, Bitcoin's price touched the red line, and again during the bull market peak in March-May 2021, Bitcoin's price touched the red line once more. According to this indicator, we can sell when Bitcoin's price approaches or touches the red line again. Currently, the red line is displayed at around $170,000. As shown in the figure below.
Indicator 3: Stock-to-Flow Model (S2F Model)
Over time, Bitcoin's price changes with the stock-to-flow ratio. When the price is above the S2F level, the divergence line changes from green to red. When the price is below the S2F line, the divergence line changes from red to green. From the current trend of this indicator, the first quarter of next year (2025) seems to be a favorable time to sell. As shown in the figure below.
Indicator 4: Pi Cycle Top Indicator
This indicator uses the 111DMA (111-day moving average) and 350DMA x 2 (twice the 350-day moving average) to identify market cycle tops. Historically, in the past three bull market cycles, when the 111DMA moves upward and crosses the 350DMA x 2, we see it coinciding with Bitcoin's price peaking. Currently, the green line of this indicator (350DMA x 2) is at $120,000, which means that this bull market may peak after Bitcoin breaks through $120,000. As shown in the figure below.
Indicator 5: The Puell Multiple
This indicator primarily highlights two important range areas for Bitcoin. When the Puell Multiple enters the green box area, it indicates a period of extremely low Bitcoin value, while entering the red box area indicates a period of extremely high Bitcoin value. We need to sell when the Puell Multiple approaches or enters the red area. However, considering the current market situation, the suggestion here is to consider selling in batches when this indicator exceeds 2 and to escape when it exceeds 3. As shown in the figure below.
Indicator 6: Miner Revenue (Fees vs Rewards)
Historically, in previous bull markets, whenever Bitcoin's price began to peak, the percentage of Fees would rise significantly, as the demand for Bitcoin naturally increases during the bull market with the entry of new market participants generating more transactions. According to the current indicators, when the percentage of Miner Fees exceeds 30%, it may be time to consider selling Bitcoin in batches. As shown in the figure below.
Indicator 7: MVRV Z-Score
This indicator is used to determine whether Bitcoin's value is undervalued or overvalued. Historically, since 2011, whenever the MVRV Z-score approaches or exceeds 7, it indicates that the market is entering a peak. As shown in the figure below.
Indicator 8: Net Unrealized Profit/Loss (NUPL)
This indicator assesses the total unrealized profit/loss of Bitcoin held by investors. Historically, whenever this indicator approaches or reaches 75%, it may be time for you to escape the peak. As shown in the figure below.
Indicator 9: 2-Year MA Multiplier
This indicator uses the 2-year MA (moving average) and the multiplication of this moving average, i.e., 2-year MA x 5, to predict Bitcoin's price. Historically, when Bitcoin's price approaches or exceeds 2-year MA x 5 (the red line in the chart), it is the best time to sell Bitcoin. As shown in the figure below.
Indicator 10: 200 Week Moving Average Heatmap
This indicator uses a color heatmap based on the growth rate of the 200-week moving average and assigns a color to the price chart based on the monthly growth percentage of the 200-week moving average. Historically, when we see orange or red dots on the price chart, it indicates that the market is overheated and it is the best time to sell Bitcoin for profit. As shown in the figure below.
Indicator 11: The Golden Ratio Multiplier
This indicator uses multiples of Bitcoin's 350-day moving average (350DMA) to identify potential resistance areas for price fluctuations. From the current indicators, the area above the green line and reaching the red line is a relatively good range for selling in batches. As shown in the figure below.
Indicator 12: RHODL Ratio
This indicator uses the ratio of realized value HODL waves. When the orange line approaches or reaches the red band area, it indicates that the market is overheated and is suitable for taking profits in batches. As shown in the figure below.
Indicator 13: Coin Days Destroyed
This indicator shows when old, dormant Bitcoins suddenly awaken and are sent back to the market. When long-term holders begin to transfer, it often means they are about to sell for profit. Therefore, we often see a significant spike in CDD before the market peaks. As shown in the figure below.
Indicator 14: Bitcoin Bull Run Index (CBBI)
This indicator is a comprehensive data indicator that helps us understand the stage of the Bitcoin cycle by integrating 9 other indicators. A higher score indicates a potential top of the Bitcoin explosive cycle. According to the current display data of this indicator, when the value exceeds 80, you can start considering selling Bitcoin in batches. As shown in the figure below.
Indicator 15: Ahr999
This indicator was proposed by a Chinese netizen named Ahr999 in the e-book "HODL Bitcoin." Currently, this HODL expert has retired from the scene, and any existing accounts with the same name online are not the real Ahr999. The calculation formula for this indicator is = (Bitcoin price / 200-day dollar-cost averaging cost) * (Bitcoin price / exponential growth valuation), where the exponential growth valuation is the fitting result of coin price and coin age.
This indicator is also known as the Bitcoin HODL indicator and is relatively simple to use. When the index is below the green line (value of 1.2), it indicates entering the dollar-cost averaging zone. When the index is below the red line (value of 0.45), it indicates entering the bottom-buying zone. Similarly, when the index exceeds the green line, it indicates a consideration for selling. Currently, this indicator seems less suitable for guiding peak escapes and is more suitable for long-term dollar-cost averaging reference. As shown in the figure below.
In addition to the above indicators, if you enjoy studying candlestick charts, you can also combine weekly or monthly MACD, RSI, and other indicators for auxiliary reference. Moreover, all these periodic indicators can not only be used to assist in guiding selling (peak escape) operations during a bull market but are also applicable for seizing accumulation opportunities during a bear market.
In summary, there are still quite a few indicators for Bitcoin at present. Although we have shared 15 indicators, the key here is not to use all the indicators but to select a few that you believe are the most effective for long-term auxiliary reference.
No indicator is perfect, and when an indicator is focused on by everyone, it may no longer be a perfect indicator. What you need is to find new points of integration from different indicators. Additionally, we need to keep ourselves updated, such as considering changes in policies regarding the crypto industry in various countries and global macroeconomic conditions for comprehensive consideration and judgment.
At the same time, in this relatively long trading process, we also need to maintain sufficient patience and continuously improve our trading strategies and trading discipline.
Of course, one last point to remind is that all data indicators are based on historical data extrapolation or model calculations and can only be used as auxiliary references. Your trading operations should also be based on your own risk preferences and position management. The indicators listed above are periodic indicators and have little guiding significance for short-term operations.
Note: The above content is just personal viewpoints and analysis, only for learning records and communication purposes, and does not constitute any investment advice. Any projects or websites mentioned in the article have no direct interest relationship with Talking about Li and Talking about Outside (Talking about Li and Talking about Outside does not accept any advertising from project parties). Please evaluate the safety of corresponding projects or websites on your own. Investment always carries risks; do not enter situations you do not understand, and do not play in situations you cannot afford to lose.
