Pi Cycle Top Indicator
This indicator gives sell signals at the end of a bullish cycle on Bitcoin, so it's very important to keep an eye on it!
2 min read
The Pi Cycle Bitcoin Top Indicator has a very self-explanatory name: it helps us find the high points of Bitcoin at the end of a bull run. It's a sell signal indicator that applies to large time units: Daily, Weekly, and Monthly.
The sell signal is given when a "Pi Cycle Top" label is printed on the Bitcoin chart. This indicator ignores small market movements and focuses on long, underlying trends.
This makes it a powerful tool for spotting the end of a bull market and the beginning of a bear market.
Since 2013, the Pi Cycle Top Indicator has only been triggered 4 times, which is very few, but each time, the signal from this indicator could have saved your wallet if you followed its advice: sell your bitcoins...!
The image above shows the 4 sell signals that have been sent to us since 2013. And the red rectangles are used to highlight the periods of market decline that followed the signals, right up to the bottom that was reached.
Taking these 4 signals into account, we can see that the Bitcoin price fell by an average of 71.25% after their appearance. This demonstrates the relevance of this indicator's sell signals. But beware: this indicator has only been triggered very rarely, and we lack the data to be sure of its accuracy in the future. It could be triggered and only precede a 15% drop before new highs, in which case you'd be sorry you sold all your Bitcoins. Conversely, it may not trigger, as in November 2021, when BTC was approaching $70,000, the price violently fell by over 70% without our being warned by the indicator.
As you can see, this indicator is like all the others; on its own, it's not enough to make 100% good decisions, but it's invaluable when combined with other indicators, such as chartist and fundamental analysis.
In April 2021, when Bitcoin was reaching its new ATH of $64,000, seeing the Pi Cycle Top trigger on the upper bound of an ascending bevel (which is a bearish figure) would have made you realize very quickly that Bitcoin was in danger…
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