Original title: “Does the encryption market need to escape? Nearly 20% of indicators have peaked and fell back ”

Original authors: Viee, Biteye

 

Every bull market not only creates wealth, but also creates countless illusions of wealth. When the market is excited, few people can remain sober and gracefully “escape”. In the face of a surging market, how to leave the market at a timely time near the high point and avoid asset shrinkage caused by a deep correction requires us to comprehensively study and judge multiple market indicators.

 

This paper Biteye analyzed 15 commonly used top-escape indicators and found that one-fifth of the indicators have reached the top-escape range in 24 years, namely: Bitcoin Rhodl ratio, USDT current financial management, and altcoin seasonal index. As a result, how should we respond to the subsequent development of the market?

 

 

1. Introduction to indicators

 

1. AHR999 coin hoarding indicator

 

This indicator was created by Weibo user ahr999 to help Bitcoin fixed investment users make investment decisions based on opportunity strategies. This indicator implies the yield on short-term fixed investment in Bitcoin and the deviation of Bitcoin price from expected valuation.

 

Indicator range:

 

·4: It is recommended to significantly reduce positions

· 1.2-4: Watch and see areas and remain vigilant

· 0.45-1.2: Fixed investment area, positions can be gradually established

·0.45: Strong bargain-hunting area

 

Current status: The indicator value is 1.21, which has not yet peaked and is in the wait-and-see range. It is recommended to be cautious.

 

Link: www.coinglass.com/zh/pro/i/ahr999

 

2. AHR999 escape indicator

 

The AHR999 escape top indicator is a sister indicator to the hoarding indicator and is specifically used to identify the top area of the market. This indicator determines whether the market is overheating by observing how far prices deviate from long-term trend lines. It gave accurate warning signals at the tops of the two major bull markets in 2017 and 2021 and was an important tool to avoid chasing high.

 

Indicator range:

 

·=0.45: Severe overheating, consider escaping top

 

Current status: The indicator value is 2.48, and there is no peak signal during this cycle.

 

Link: www.coinglass.com/zh/pro/i/ahr999-escape

 

3. Top indicator of the Pi cycle

 

The Pi Cycle Top indicator predicts potential market tops by comparing the relationship between the 111-day moving average and the 350-day moving average. Historically, when moving averages cross, Bitcoin’s price has typically reached the top of the cycle, indicating a potential market reversal.

 

Signal characteristics:

 

·Two lines crossing: top signal triggering

 

·Rapid divergence: bearish outlook

 

·Progressive approach: reminder of vigilance

 

Current status: There is still a long distance between the two moving averages, and there is no top signal yet. The next crossing is expected to be in October 2025.

 

Link: www.bitcoinmagazinepro.com/charts/pi-cycle-top-prediction/

 

4. Bitcoin Rainbow Chart

 

The rainbow chart is an intuitive long-term valuation model that divides the Bitcoin price range into 9 different color bands. The model is based on logarithmic regression, taking into account the long-term growth characteristics and cyclical characteristics of Bitcoin. In multiple market cycles in the past, rainbow charts have shown good guidance, especially in identifying extreme areas.

 

Indicator range:

 

·Red: Bubble area, sell signal

·Yellow: Overheated area, stay vigilant

·Green: Healthy area, holding area

·Blue: Value area, buying opportunities

 

Current status: Prices are in the green zone, indicating that the valuation is relatively reasonable and there is no top signal.

 

Link: www.coinglass.com/zh/pro/i/bitcoin-rainbow-chart

 

5. Bitcoin terminal price indicator

 

The terminal price is the transferred price multiplied by 21. The price of the transfer requires dividing the number of days the coin has been destroyed by the existing supply of Bitcoin and the time it has been in circulation. This indicator can effectively filter out market speculative factors and reflect the true value of the Bitcoin network.

 

Signal characteristics: The closer the Bitcoin price is to the red line, the closer the market is to the top.

 

Current status: Not yet peaked

 

Link: www.bitcoinmagazinepro.com/charts/terminal-price/

 

6. Proportion of Bitcoin market value

 

The market capitalization indicator reflects Bitcoin’s dominant position in the entire cryptocurrency market. This indicator is often used to determine market cycles and capital flows. When Bitcoin’s share of market value declines, it usually means that funds begin to shift to altcoins. Historical data shows that changes in Bitcoin’s market value share can often signal a turning point in the entire cryptocurrency market.

 

Indicator range:

 

· 65%: Bitcoin’s strong period

· 40-65%: Balance period

·40%: Altcoins are active

 

Current status: The market value accounts for about 60%, which is in a relatively balanced range.

 

Link: www.coinglass.com/zh/pro/i/MarketCap

 

7. Bitcoin CBBI Index

 

CBBI(Combined Bitcoin Binary Index) is a comprehensive index that combines multiple technical indicators and on-chain data to better identify the transition points of the bull-bear cycle. Its advantage is that it reduces the limitations of a single indicator through multi-dimensional data.

 

Indicator range: Greater than 90 means the market has reached the top.

 

Current status: The index value is 79, indicating that the market is slightly hot, but has not yet peaked.

 

Link: www.coinglass.com/zh/pro/i/cbbi-index

 

8. Bitcoin MVRV Z Index

 

The MVRV Z index is an important on-chain analytical indicator that judges the market cycle by comparing the deviation between market value and realized value. When this indicator is too high, it means that the market value of Bitcoin is overvalued relative to the actual value, which is unfavorable to the price of Bitcoin; otherwise, it is undervalued. According to past historical experience, when this indicator is at a historical high, the probability of a downward trend in Bitcoin prices increases, and we must pay attention to the risk of chasing high.

 

Indicator range: Greater than 5 means the market has reached the top.

 

Current status: The index is 2.5 and has not yet peaked.

 

Link: www.coinglass.com/zh/pro/i/bitcoin-mvrv-zscore

 

9. Bitcoin Rhodl ratio

 

Rhodl ratio is a compound on-chain indicator that compares the behavioral characteristics of currency holders in different periods to determine potential turning points in the market. When the RHODL ratio starts to approach the red band, it may indicate that the market is overheating. Historically, this has been a good time for investors to take profits every cycle.

 

Indicator range: Near the red band, it may indicate that the market is overheating. At ratio= 10000, the market is near the top.

 

Current status: It has not entered the red band currently, but this indicator entered the peak range during November 2024.

 

Link: www.coinglass.com/zh/pro/i/r-hodl-ratio

 

10. Bitcoin Mayer Multiple

 

Bitcoin Mayer Multiple is a technical indicator used to analyze Bitcoin market conditions, proposed by Trace Mayer. It evaluates the market’s relative valuation by comparing the current price of Bitcoin to its 200-day Moving Average (200DMA).

 

Indicator range:

 

·Mayer multiple 1: indicates that the current Bitcoin price is above its 200-day moving average and the market may be overbought.

 

·Mayer multiple 1: indicates that the current Bitcoin price is below its 200-day moving average and the market may be oversold.

 

·Mayer multiple ≈ 1: indicates that the current Bitcoin price is close to its 200-day moving average, and the market may be in a relatively balanced state.

 

·Historically, when the Mayer multiple exceeds 2.4, it usually indicates that the market is overheating and a possible correction or bear market may occur. When the Mayer multiple is below 0.8, the market may be undervalued and may be a good time to buy.

 

Current status: The index is 1.26, the market is overbought, but has not yet peaked.

 

Link: www.coinglass.com/zh/pro/i/mayer-multiple

 

11. Days of continuous net outflow of ETF

 

This indicator tracks the flow of funds in Bitcoin ETFs, and consecutive net outflow days often reflect the confidence of institutional investors. This is a relatively new indicator that has gradually attracted market attention since the launch of spot ETFs.

 

Signal characteristics:

 

· 10 days: Significant bearish signals

5-10 days: vigilance is needed

·5 days: normal fluctuations

 

Current status: 1 consecutive day of net outflow, which belongs to the normal market fluctuation range. This cycle has a maximum of 8 consecutive days, and no 10 days have occurred.

 

Link: www.coinglass.com/zh/bitcoin-etf

 

12. Proportion of ETFs in BTC

 

This indicator reflects the proportion of Bitcoin held by ETFs to total circulation and is used to assess institutional participation. This indicator can reflect the acceptance and depth of participation of traditional financial institutions in Bitcoin.

 

Signal characteristics: =3.5% is an indicator of escape from the top, which also suggests low institutional participation

 

Current status: The proportion is close to 6%, indicating that institutional participation is in a positive growth stage.

 

Link: www.coinglass.com/zh/bitcoin-etf

 

13. USDT Current Financial Management

 

The USDT current financial interest rate is an important indicator to measure the cost of capital in the market. This indicator reflects the overall liquidity situation of the cryptocurrency market.

 

Signal characteristics: =29% is the escape range

 

Current status: Interest rate is about 6.68%, which is at a normal level. However, during March 2024, the indicator entered the peak range, reaching 65%.

 

Link: www.coinglass.com/zh/pro/i/MarginFeeChart

 

14. Altcoin seasonal index

 

This indicator is used to determine whether the market has entered an active period of altcoin. By comparing the performance of Bitcoin with that of major altcoins, you can determine whether funds are starting to shift to riskier smaller currencies.

 

Indicator range:

 

· 75: Altcoin season, exceeding 75 means that the market is close to peak

· 25-75: Balance period

25: Bitcoin’s dominant period

 

Current status: The index is 41, but during December 2024, the index entered the peak range, reaching 88.

 

Link: www.coinglass.com/zh/pro/i/alt-coin-season

 

15. Micro-strategy cost indicators

 

This indicator tracks MicroStrategy’s average Bitcoin holding cost and serves as a benchmark for institutional investors. Since MicroStrategy is one of the largest holders of corporate Bitcoin, its cost line often becomes an important psychological price in the market.

 

Indicator range:

 

·Current prices are above costs: institutional profit range

·Current prices are close to costs: support level

·Current prices are below costs: potential buying opportunities

 

Current status: The average cost of micro-strategies is about 60,000 yuan, which is in the institutional profit range.

 

Link: www.coinglass.com/zh/pro/i/micro-strategy-cost

 

2. Summary

 

“Bear markets make you bankrupt, bull markets make you return to poverty.” It is much more difficult to remain rational during the market carnival and retreat unscathed during the madness than to buy at the bottom. At present, only some indicators show signs of escaping from the top, which does not mean that the entire market is definitely peaking. If you think the market is at risk of peaking, you can also consider:

 

Set points to reduce positions in batches and don’t expect a perfect top.

 

Cash profits into stablecoins or fiat currencies rather than shifting to riskier altcoins.

 

At a high position, I would rather sell early than late. Profit-taking is not an end, but an accumulation of ammunition for the next round.

 

Remember that every top is an opportunity for some people to create wealth and a wealth trap for most people. The opportunities given by the market are equal to everyone, but those who can seize the opportunity are often those who are prepared.

 

This article is from a submission and does not represent the views of BlockBeats.