All significant price peaks for Bitcoin have been accurately identified using the Pi Cycle Top indicator. The indicator's curves are once again convergent but far from intersecting. The curves' maximum deflection occurred at the same time as the weekly 21 EMA's rebound.
Due to its interesting reliability and remarkable simplicity, the Pi Cycle Top indicator has experienced tremendous growth. The signal it has produced has consistently and accurately predicted the peak of the price of bitcoin on four separate occasions.
The indicator curves are currently widely apart with Bitcoin setting a new all-time high (ATH) of about $68,500. They have just begun to approach one another again, though. Does this indicate that the bull market in cryptocurrencies will continue?
The Pi Cycle Top indicator: what is it?
Pi Cycle Top is a fairly straightforward technical analysis indicator that works "magically" well. The "magic" of it is that despite how straightforward it is, it has correctly predicted 4 historical peaks in the price of bitcoin, each of which was followed by a correction of at least 55%. The indicator, developed by Philip Swift, considers two displaced moving averages (DMA):
- 350-day DMA x 2
- 111-day DMA
Both moving averages are long-term indicators, but because the second one considers a shorter time frame, it is unquestionably more responsive. The Pi Cycle Top indicator sends out its strongest signal when the 111-day DMA crosses the 350-day DMA x 2 from below. Since the signal's date, Bitcoin has consistently peaked five days before or after the signal with a maximum tolerance level.
Once more, the curves are convergent.
The Pi Cycle Top indicator curves last came together on April 12, 2021. After two days, on April 14, when Bitcoin hit its historic ATH of $64,895, a correction began. Just after the May drop to the $30,000 region and the subsequent 3-month consolidation, the indicator curves began to dynamically diverge.
However, after the correction ended and the BTC price started a significant rebound after hitting a low of $29,500 on July 21, the rate of the curves' divergence has started to slow down. About 90% more than the 111-day DMA was the 350-day DMA times 2. (red arrow). The two moving averages have been relocating toward one another ever since.
Both the bull market support line and the Pi Cycle Top
Finally, it's vital to note that an important development in BTC technical analysis occurred at the same time the Pi Cycle Top indicator curves started to converge once more. The so-called bull market support line held over the period of October 21–October 29. (orange area). Thus, it occurred precisely at the moment that the Pi Cycle Top curves stopped drifting apart.
It is typical to assume that the bull market support line on the weekly chart corresponds to the 21-period exponential moving average (21 EMA) while performing long-term technical analysis of the Bitcoin price (pink). Price movement above this line and frequent reversals of it have historically indicated the presence of a bull market. A bear market was started by drops below and its bearish validation.
It is significant that these two occurrences, the continuation of the bull market support line and the start of the Pi Cycle Top indicator curves' resumption of convergence, occurred simultaneously. It is difficult to avoid the conclusion that there will be significant increases in the price of cryptocurrencies in the future when these signals are compared to bullish on-chain data on Bitcoin mining.
