Analyst Forecasts Bitcoin Bull Run Top With Historically Proven Indicator
August 19 2024 - 5:30PM
NEWSBTC
In a video update on YouTube, crypto analyst Rekt Capital delved
into the dynamics of Bitcoin’s price movements through the lens of
the PI Cycle Top Indicator, a predictive tool that has garnered
attention for its historical accuracy in pinpointing the peaks of
Bitcoin bull runs. Here’s How High Bitcoin Price Could Go This
Cycle The PI Cycle Top Indicator operates by tracking two key
moving averages: a short-term 111-day moving average (colored
orange in Rekt Capital’s visual analysis) and the 350 day moving
average (depicted in green) to gauge extended market trends. A
crucial aspect of this tool is the “crossover” event where the
short-term moving average rises above the long-term average,
historically signaling a peak in Bitcoin’s bull market within a few
days. However, the current market data shows that these two moving
averages are diverging rather than converging, suggesting that the
conditions for a bull market peak are not yet in place. “As these
two PI Cycle moving averages are currently diverging from one
another, the bull market peak is nowhere close,” Rekt Capital
explained in his video. Related Reading: Bitcoin Market Facing A
Persistent Net Sell-Side Bias, Glassnode Reveals The 111-day moving
average serves as a critical metric in Rekt Capital’s analysis.
During bear market phases or pre-halving years, this moving average
acts as a barometer for bargain buying opportunities, oscillating
around it in downtrends. Conversely, in halving years, such as
2020, it tends to act as a support level, underpinning uptrends
that lead to new all-time highs. “Any dip below this moving average
is a bargain buying territory,” Rekt Capital noted, emphasizing the
strategic importance of this level during different market phases.
Currently, Bitcoin is trading below this moving average,
approximately at $59,000, which has not happened for a significant
period since the pre-halving year, marking a potentially
undervalued state relative to historical patterns. The analysis
suggests that if Bitcoin reclaims the $63,900 level—just above the
current position of the 111-day moving average—it could end the
current bargain buying opportunity, setting the stage for further
upward movement. “We are approximately $5,000 away from reclaiming
this region. Not much needs to happen for Bitcoin to bounce back
and reclaim this region to end this bargain buying opportunity,”
remarked Rekt Capital. Related Reading: When To Be Bearish On
Bitcoin? On-Chain Analyst Answers Another element of the PI Cycle
Top Indicator is the 350 day moving average. This average typically
gets revisited in later stages of the market cycle, often acting as
resistance before an upside deviation occurs. “Upside deviations
beyond the green moving average that’s when we see parabolic price
action take place,” Rekt Capital pointed out, referencing past
events in 2013 and 2017 where such movements were observed. The
current green moving average resides around $96,000, indicating a
significant upside potential before any parabolic risks manifest.
Rekt Capital’s analysis suggests that while Bitcoin is far from
reaching the $96,000 mark, historical patterns predict that it will
eventually approach and possibly exceed this level, leading to a
short-lived period of rapid price increase. “[We are] nowhere close
to this green moving average because it resides at around $96k, so
we’re still almost $30k away from this region […] once we break
beyond $96k we have to understand that the clock is starting to
then start ticking really for the end of the ball run and we might
have have a a window of just a few months where Bitcoin will be
rallying uninterruptedly with of course pullbacks,” the analyst
explained. Looking ahead, Rekt Capital emphasized the importance of
monitoring the convergence of these two moving averages for signs
of a potential bull market peak. “We need to see a flick up in the
Pi Cycle moving average for that crossover to be in place to some
degree,” he stated, indicating that a sharp rise in price action is
required for a definitive crossover to materialize. At press time,
BTC traded at $58,695. Featured image created with DALL.E, chart
from TradingView.com
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