Exclusive Bitcoin Pi Cycle Indicator Signals Overheated Bull Market

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In Brief
  • Pi cycle top indicator has flashed today for the first time since 2017.

  • Historically, this has signaled the end of bull markets.

  • Price action and other indicators do not support this scenario.

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The bitcoin Pi cycle top indicator has just flashed for the first time since the end of the 2017 bull run. 

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The two displaced moving average (DMA) curves of this indicator crossed again and signaled a potential end to the bitcoin bull market.

Three weeks ago BeInCrypto reported on the impending intersection. Today we will analyze other factors to see if a bearish bitcoin scenario is probable.

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Bitcoin Pi cycle cross

Yesterday, bitcoin (BTC) reached its highest-ever weekly close slightly above $60,000. Today it reached a new high of $62,750 after a month of trading below $60,000.

However, the new all-time high might be dampered as the Pi cycle indicator has flashed. The Pi cycle is the intersection of the 350-day and 111-day DMAs. This signal has historically flashed just before significant bitcoin bear markets.

At the time of press, bitcoin is trading for $62,745.

BTC/USD chart by TradingView

Previous peaks

So far, the Pi cycle top indicator has signaled three cycle peaks—twice in 2013 and once in 2017. In all cases, the price of Bitcoin peaked within five days of the DMAs crossing.

BTC/USD chart by TradingView

Historically, almost immediately after the Pi cycle signal, a bear market lasting several years followed. During these cycles, bitcoin losing around 80% of its value in the years that followed.

Bull run end in sight?

If Bitcoin did reach the peak of its current cycle today or in the coming days, an 80% correction would bring prices back to the $12,000 region.

This would be a drop below the previous 2017 high of $20,000. So far, this has never happened in the history of Bitcoin cycles.

It’s also worth taking a look at Bitcoin on-chain analysis. As BeInCrypto regularly reports, none of its main indicators yet suggest activity resembling the final stages of the bull market.

On the contrary, the vast majority of indicators point to a lot of room for further increases in the BTC price. The constantly dropping supply of BTC on exchanges, HODL Waves, Reserve Risk, and Hodler Supply are some of the most important indicators of on-chain analysis. None are currently showing any characteristics of a market peak.

Conclusion

The Pi cycle top indicator has flashed, suggesting that bitcoin may be nearing the end of its bull market.

However, there are no signals from other technical or on-chain indicators that agree with this reading. On the contrary, most major indicators that have historically marked cycle peaks are currently far from such pessimism.

If we can assign any meaning to the Pi cycle indicator, it would be that the market has become increasingly heated. This could be a signal that a relatively small 20-30% correction could be incoming in order to keep the macrostructure of the upward trend intact.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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PhD and an assistant professor at an international university in Lublin, Poland. Spent 10 years studying philosophy of nature and sport science. An author of 4 books and two dozens of scientific articles. Now, he is using his mind for the benefits of the cryptocommunity. Technical analysis enthusiast, Bitcoin warrior, and a strong supporter of the idea of decentralization. Duc in altum!

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