Bitcoin halving is approaching, but its price plummeted to $65,000 in the early morning of the 13th. Will the future market develop upwards or downwards? The following are 9 indicator signals provided by Dongqutou for readers to judge the trend of Bitcoin.
1. RSI Divergence:
Bonnazhu from the Nothing Research team shared the two most effective technical indicators, RSI divergence and moving average alignment, on the X platform. RSI divergence can be divided into top divergence and bottom divergence. The former refers to the situation where the price reaches a new high but RSI does not, even showing a downward trend. The latter refers to the situation where the price reaches a new low but RSI does not, even showing an upward trend. RSI divergence indicators often lead the market, and the longer and more frequent the divergence, the stronger the reversal signal. It is worth noting that in large cycles, weekly RSI divergence is more meaningful, and in one cycle, top divergence may occur repeatedly, while bottom divergence often forms at once.
2. Moving Average Alignment:
Moving average alignment can be divided into bullish alignment and bearish alignment. The former refers to the short-term moving average (5-day moving average) being above the medium-term moving average (25-day and 50-day moving averages), and the medium-term moving average being above the long-term moving average (100-day and 200-day moving averages), with the overall moving average trending upwards. The latter refers to the short-term moving average being below the medium-term moving average, and the medium-term moving average being below the long-term moving average, with the overall moving average trending downwards. This indicator has a lagging characteristic, and often when the bullish and bearish alignments reverse, the market tops and bottoms have already passed a certain period of time. The trend turning points that appear in this indicator are called upward golden crosses and downward death crosses.
3. Bull Market Duration:
Cryptocurrency analyst Virtual Bacon previously stated that based on the previous Bitcoin halving cycles, the current bull market may last until the end of 2025 at the latest. Therefore, regardless of the market trend, he will exit at that time at the latest. Glassnode data shows that the trends of the previous two bull market cycles were similar, with phase highs reached about two years after the cycle lows, followed by rapid declines into bear markets. The current cycle (black line) is 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 200-day and 21-week EMA:
Virtual Bacon also suggested that investors should pay attention to Bitcoin’s 200-day and 21-week exponential moving averages (EMA). Currently, the Bitcoin price is still far above the 200-day moving average.
5. Bitcoin Rainbow Chart:
The Bitcoin Rainbow Chart maps the evolution of Bitcoin prices 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 approach a top, while the closer it is to the blue zone, the more likely it is to approach a bottom. Currently, it is in the yellow “HODL” state.
6. Pi Cycle Top Indicator:
The Pi Cycle Top Indicator uses the 111-day moving average (111DMA) and the multiple of the 350-day moving average (350DMAx2) to predict the top of Bitcoin. When the 111DMA moves upward and breaks through the 350DMAx2 line, it is a possible signal that Bitcoin is at or near the top.
7. Altcoin Frenzy:
In the later stages of a bull market, funds in the market gradually overflow from Bitcoin to altcoins and even various junk projects. The significant features of this stage are that many altcoins frequently experience surges of several times or tens of times, causing extreme FOMO sentiment. The valuations of altcoins are exaggerated, with valuations reaching hundreds of millions or even billions. New projects keep appearing, and most of them take advantage of the hot funds in the bull market to exploit investors.
8. Exchange Bitcoin Reserves:
A prominent feature at the end of a bull market is that a large amount of Bitcoin will be transferred to exchanges for profit-taking, which will gradually lead to a decline in the Bitcoin price. Currently, the Bitcoin reserves of centralized exchanges are continuously decreasing, and if the data suddenly increases in the future, it may be a warning.
9. Google Search Volume:
This reflects the public’s level of concern about Bitcoin. Generally, when the search volume surges, it is also a symbol of the end of the bull market. Many Chinese Key Opinion Leaders (KOLs) have jokingly mentioned on social media platforms that when the search volume explodes, the bull market is nearing its end.
Related Reports:
– LTP Research October Crypto Market Observation: Bitcoin Price, Volatility, and Trading Volume Surge
– Bitcoin Price Prediction for 2024: Summary of Views from Major Banks and Hedge Funds
– Arthur Hayes: Geopolitical Turmoil Will Become a New Driving Force for Bitcoin Price.