Key Points
- Bitcoin [BTC] is approaching its all-time high again after facing rejection at the $69k level.
- Metrics such as the Pi Cycle Top Indicator, MVRV ratio, and Puell Multiple can help predict Bitcoin’s cycle tops.
Bitcoin [BTC] is heading towards its record high once again, after a setback at the $69k level on March 5th. Large investors were purchasing during the downturn, and the daily mining fee was the highest it’s been since December 2021.
We are currently in the midst of a bull run, according to these indicators. The question that arises is how will the average investor know when to cash out once Bitcoin enters price discovery territory?
Setting Targets and Using Indicators
Some investors may have set plans, such as selling all their BTC holdings if Bitcoin reaches $150k. However, these targets aren’t based on data or technical analysis. For those who lack the time or expertise to time the cycle tops, certain indicators and metrics can be helpful.
For instance, the Pi Cycle Top Indicator is a set of simple moving averages on the daily chart. It has accurately predicted the tops in 2021, 2017, and 2013. However, it doesn’t provide any information about potential bottoms and isn’t forward-looking.
Other Indicators and Criticisms
The MVRV ratio above 3.7 on CryptoQuant has also been a reliable top indicator since 2011. However, it’s not as close to the $69k top as investors might want. Similarly, the Puell Multiple is another reliable indicator. A reading of 6 or above indicates a possible top, and 0.4 or below signals a potential bottom.
However, these indicators don’t cause Bitcoin prices to plummet. They’re only a small part of the complex web that traders and investors must navigate to make informed decisions.
In December 2023, it was reported that another way to time the next Bitcoin cycle top is using the Rainbow chart. According to this chart, the current bull run’s target is $192k for Bitcoin in February 2025.
