Bitcoin halving is approaching, but its price plummeted to $65,000 in the early morning of the 13th. Will the future development be upward or downward? The following 9 indicators are provided by Dongqutu for readers to judge Bitcoin’s cyclical trend.
Table of Contents:
1. RSI Divergence
2. Moving Averages
3. Duration of Bull Market
4. Bitcoin’s 200-day, 21-week EMA
5. Bitcoin Rainbow Chart
6. Pi Cycle Top Indicator
7. Altcoin Surge
8. Bitcoin Reserves on Exchanges
9. Google Search Trends
Bitcoin will soon experience its halving event this month, but while the price of gold has repeatedly hit historic highs and the price of silver continues to rise, Bitcoin, which has strong hedging properties, is still hovering around $70,000.
Regarding the future direction of Bitcoin, Dongqutu will summarize the following 9 indicator signals for readers to judge Bitcoin’s cyclical trend.
1. RSI Divergence:
Nothing Research team member bonnazhu shared on the X platform their two most effective technical indicators for determining market trends, which are RSI divergence and moving averages. RSI divergence can be classified as either bearish or bullish divergence. Bearish divergence occurs when the price reaches a new low but the RSI does not, and even shows an upward trend. Bearish divergence, on the other hand, occurs when the price reaches a new high but the RSI does not, and even shows a downward trend. Bonnazhu explained that RSI divergence indicators often lead the market and the longer and more frequent the divergence, the stronger the reversal signal. However, it should be noted that in longer cycles, weekly RSI divergence is more meaningful, and in one cycle, repeated bearish divergence may occur, while bullish divergence often forms at once.
2. Moving Averages:
Moving averages can be classified as either bullish or bearish. Bullish moving averages occur when short-term moving averages (5-day moving average) are above medium-term moving averages (25-day and 50-day moving averages), which are also above long-term moving averages (100-day and 200-day moving averages), and the overall trend of the moving averages is upward. Bearish moving averages, on the other hand, occur when short-term moving averages are below medium-term moving averages, which are also below long-term moving averages, and the overall trend of the moving averages is downward. Bonnazhu explained that this indicator is characterized by lags, as market tops and bottoms have already passed after the reversal of the bullish or bearish arrangement. The trend reversal points that appear in this indicator are called upward-leading golden crosses and downward-leading death crosses.
3. Duration of Bull Market:
Cryptocurrency analyst Virtual Bacon previously stated that based on previous Bitcoin halving cycles, the current bull market may last until the end of 2025. Therefore, regardless of the market trend, he will exit at the latest by then. Glassnode data shows that the trends of the previous two bull market cycles were similar, for example, both reached a phase peak two years after the cycle low, followed by a rapid decline into a bear market. The latest cycle (black line) is currently in an upward phase, and if compared to the previous two cycles, Bitcoin may reach a new peak by the end of 2025.
4. Bitcoin’s 200-day, 21-week EMA:
Virtual Bacon also suggested that investors should pay attention to Bitcoin’s 200-day and 21-week Exponential Moving Averages (EMA). From the chart, it can be seen that the current Bitcoin price is still far above the 200-day moving average.
5. Bitcoin Rainbow Chart:
The Bitcoin Rainbow Chart maps the evolution of Bitcoin’s price over time and indicates whether Bitcoin may be approaching a top or bottom through colored bands. The closer the price is to the red zone, the more likely it is to reach a top, while the closer it is to the blue zone, the more likely it is to approach a bottom. In the current chart, Bitcoin is in the “HODL” state indicated by the yellow color.
6. Pi Cycle Top Indicator:
The Pi Cycle Top Indicator predicts Bitcoin’s top by using the 111-day moving average (111DMA) and the multiple of the 350-day moving average (350DMAx2). When the 111DMA moves up and crosses the 350DMAx2 line, it is a possible signal that Bitcoin is at or near its top.
7. Altcoin Surge:
In the later stages of a bull market, funds gradually flow out of Bitcoin into altcoins, and even various low-quality projects. The significant features of this stage include: many altcoins experience rapid surges of several times or even tens of times, leading to extreme FOMO sentiment; altcoin valuations become exaggerated, with valuations reaching billions or even tens of billions; new projects emerge, and most projects take advantage of the bull market to exploit retail investors.
8. Bitcoin Reserves on Exchanges:
A notable feature in the late stages of a bull market is that a large amount of Bitcoin is transferred to exchanges for profit-taking, which gradually leads to a decline in the price of Bitcoin. Currently, the Bitcoin reserves on centralized exchanges are declining, and if the data suddenly increases in the future, it could be a warning sign.
9. Google Search Trends:
This reflects the public’s level of concern about Bitcoin. Generally, when search trends surge, it is a symbol that the bull market is coming to an end. Many Chinese KOLs have jokingly mentioned on the social platform X that when the search trend surges, it means “the bull market is over.”
Related Reports:
– LTP Research October Crypto Market Observation: Bitcoin Price, Volatility, and Trading Volume Surging
– Bitcoin Price Prediction for 2024: Compilation of Views from Large Banks and Hedge Funds
– Arthur Hayes: Geopolitical Turmoil Will Become the New Driving Force for Bitcoin Prices