Author: Viee, Biteye
Each bull market not only creates wealth, but also manufactures countless wealth illusions. When the market is exuberant, few can remain clear-headed and elegantly "escape the top". Faced with a market of sharp rises and falls, how to exit at the right time near the peak and avoid the asset shrinkage caused by deep corrections requires us to comprehensively analyze multiple market indicators.
In this article, Biteye analyzed 15 commonly used escape-the-top indicators and found that one-fifth of the indicators have already reached the escape-the-top range in 2024, including: Bitcoin Rhodl Ratio, USDT Savings, and Altcoin Seasonal Index. In this case, how should we respond to the subsequent market developments?
I. Indicator Introduction
1. AHR 999 Hoarding Indicator
This indicator was created by Weibo user ahr 999, and assists Bitcoin DCA users in making investment decisions by combining timing strategies. The indicator implies the short-term DCA return of Bitcoin and the deviation of Bitcoin price from expected valuation.
Indicator range:
>4: Suggest significantly reducing positions
1.2-4: Observation area, remain vigilant
0.45-1.2: DCA area, can gradually build positions
<0.45: Strong bottom-fishing area
Current status: The indicator value is 1.21, not yet reached the top, in the observation area, and it is suggested to remain cautious.
Link: https://www.coinglass.com/zh/pro/i/ahr999
2. AHR 999 Escape-the-Top Indicator
The AHR 999 Escape-the-Top indicator is a sister indicator of the Hoarding Indicator, specifically used to identify the market top area. This indicator judges whether the market is overheated by observing the degree of deviation of the price from the long-term trend line. It provided accurate warning signals at the tops of the two major bull markets in 2017 and 2021, and is an important tool to avoid chasing highs.
Indicator range:
<= 0.45: Seriously overheated, consider escaping the top
Current status: The indicator value is 2.48, and no top signal has appeared in the current cycle.
Link: https://www.coinglass.com/zh/pro/i/ahr999-escape
3. Pi Cycle Top Indicator
The Pi Cycle Top Indicator predicts potential market tops by comparing the relationship between the 111-day moving average and the 350-day moving average. Historically, when the moving averages cross, Bitcoin's price is usually close to the cycle top, indicating a potential market reversal.
Signal characteristics:
Two lines cross: Top signal triggered
Rapid divergence: Bearish outlook
Gradual approach: Prompt vigilance
Current status: The two moving averages still have a large distance, and no top signal has appeared yet. The next expected cross is expected to occur in October 2025.
Link: https://www.bitcoinmagazinepro.com/charts/pi-cycle-top-prediction/
4. Bitcoin Rainbow Chart
The Rainbow Chart is a visual long-term valuation model that divides the Bitcoin price range into 9 different color bands. This model is based on logarithmic regression and considers Bitcoin's long-term growth characteristics and cyclical features. In past market cycles, the Rainbow Chart has shown good guidance, especially in identifying extreme regions.
Indicator range:
Red: Bubble area, sell signal
Yellow: Overheated area, remain vigilant
Green: Healthy area, hold range
Blue: Value area, buying opportunity
Current status: The price is in the green area, indicating that the valuation is relatively reasonable and no top signal has appeared.
Link: https://www.coinglass.com/zh/pro/i/bitcoin-rainbow-chart
5. Bitcoin Terminal Price Indicator
The Terminal Price is the Realized Price multiplied by 21. The Realized Price requires dividing the destroyed coin days by the current Bitcoin supply and its circulation time. This indicator can effectively filter out market speculation factors and reflect the true value of the Bitcoin network.
Signal characteristics: The closer the Bitcoin price is to the red line, the closer the market is to the top.
Current status: Not yet reached the top
Link: https://www.bitcoinmagazinepro.com/charts/terminal-price/
6. Bitcoin Market Cap Dominance
The market cap dominance indicator reflects Bitcoin's dominant position in the entire cryptocurrency market. This indicator is often used to judge the market cycle and capital flow, and when Bitcoin's market cap dominance declines, it usually means that capital is starting to shift to Altcoins. Historical data shows that changes in Bitcoin's market cap dominance often foreshadow turning points in the entire cryptocurrency market.
Indicator range:
65%: Bitcoin strong period
40-65%: Balanced period
<40%: Altcoin active period
Current status: The market cap dominance is around 60%, in a relatively balanced range.
Link: https://www.coinglass.com/zh/pro/i/MarketCap
7. Bitcoin CBBI Index
CBBI (Combined Bitcoin Binary Index) is a composite index that integrates multiple technical indicators and on-chain data, and can better identify the turning points of bull and bear cycles. Its advantage lies in reducing the limitations of a single indicator through multi-dimensional data.
Indicator range: Greater than 90 means the market has reached the top.
Current status: The index value is 79, indicating that the market is slightly overheated, but has not yet reached the top.
Link: https://www.coinglass.com/zh/pro/i/cbbi-index
8. Bitcoin MVRV Z-Score
The MVRV Z-Score is an important on-chain analysis indicator that judges the market cycle by comparing the deviation between market value and realized value. When this indicator is too high, it means that Bitcoin's market value is overvalued relative to its actual value, which is unfavorable for Bitcoin's price; conversely, it is undervalued. According to past experience, when this indicator is at historical highs, the probability of Bitcoin's price showing a downward trend increases, and the risk of chasing highs should be noted.
Indicator range: Greater than 5 means the market has reached the top.
Current status: The index is 2.5, not yet reached the top.
Link: https://www.coinglass.com/zh/pro/i/bitcoin-mvrv-zscore
9. Bitcoin Rhodl Ratio
The Rhodl Ratio is a composite on-chain indicator that judges the potential turning points of the market by comparing the behavioral characteristics of holders in different periods. When the Rhodl Ratio approaches the red band, it may indicate that the market is overheated. Historically, this has been a good time for investors to realize profits in each cycle.
Indicator range: When approaching the red band, it may indicate that the market is overheated. Ratio >= 10000 when the market is approaching the top.
Current status: It has not yet entered the red band, but the indicator entered the top range in November 2024.
Link: https://www.coinglass.com/zh/pro/i/r-hodl-ratio
10. Bitcoin Mayer Multiple
The Bitcoin Mayer Multiple is a technical indicator used to analyze the Bitcoin market condition, proposed by Trace Mayer. It evaluates the relative valuation level of the market by comparing Bitcoin's current price with its 200-day moving average (200 DMA).
Indicator range:
Mayer Multiple > 1: Indicates that the current Bitcoin price is higher than its 200-day moving average, and the market may be in an overbought state.
Mayer Multiple < 1: Indicates that the current Bitcoin price is lower than its 200-day moving average, and the market may be in an oversold state.
Mayer Multiple ≈ 1: Indicates that the current Bitcoin price is close to its 200-day moving average, and the market may be in a relatively balanced state.
Historically, when the Mayer Multiple exceeds 2.4, it usually indicates that the market is overheated and a correction or bear market may occur. When the Mayer Multiple is below 0.8, the market may be undervalued, which may be a good buying opportunity.
Current status: The index is 1.26, the market is in an overbought state, but has not yet reached the top.
Link: https://www.coinglass.com/zh/pro/i/mayer-multiple
11. Number of Consecutive Net Outflow Days of Bitcoin ETF
This indicator tracks the capital flow of Bitcoin ETFs, and consecutive net outflow days often reflect the confidence of institutional investors. This is a relatively new indicator that has gradually gained market attention since the launch of spot ETFs.
Signal Characteristics:
10 days: Significant bearish signal
5-10 days: Need to be cautious
<5 days: Normal fluctuation
Current Status: Consecutive net outflow for 1 day, within the normal market fluctuation range. The maximum consecutive days in the current cycle is 8 days, and there has been no 10-day occurrence.
Link: https://www.coinglass.com/zh/bitcoin-etf
12. Proportion of BTC Held by ETFs
This indicator reflects the proportion of Bitcoin held by ETFs to the total circulating supply, used to assess the degree of institutional participation. This indicator can reflect the acceptance and participation depth of traditional financial institutions in Bitcoin.
Signal Characteristics: <= 3.5% is a top-selling indicator, also implying low institutional participation
Current Status: The proportion is close to 6%, indicating that institutional participation is in a healthy growth stage.
Link: https://www.coinglass.com/zh/bitcoin-etf
13. USDT Demand Deposit Yield
The USDT demand deposit yield is an important indicator for measuring the overall cost of capital in the cryptocurrency market. This indicator reflects the overall liquidity conditions in the cryptocurrency market.
Signal Characteristics: >= 29% is in the top-selling range
Current Status: The yield is around 6.68%, at a normal level. However, during the period of March 2024, this indicator entered the top-selling range, reaching 65%.
Link: https://www.coinglass.com/zh/pro/i/MarginFeeChart
14. Altcoin Season Index
This indicator is used to judge whether the market has entered an Altcoin active period. By comparing the performance of Bitcoin and major Altcoins, it can be determined whether capital is starting to shift towards riskier small-cap coins.
Indicator Range:
75: Altcoin season, exceeding 75 means the market is approaching the top
25-75: Balanced period
<25: Bitcoin-dominant period
Current Status: The index is 41, however, during the period of December 2024, this indicator entered the top-selling range, reaching 88.
Link: https://www.coinglass.com/zh/pro/i/alt-coin-season
15. MicroStrategy Cost Basis Indicator
This indicator tracks the average Bitcoin holding cost of MicroStrategy, as a reference benchmark for institutional investors. As one of the largest corporate Bitcoin holders, MicroStrategy's cost basis often becomes an important psychological price level in the market.
Indicator Range:
Current price higher than cost: Institutional profit zone
Current price close to cost: Support level
Current price lower than cost: Potential buying opportunity
Current Status: MicroStrategy's average cost is around $60,000, in the institutional profit zone.
Link: https://www.coinglass.com/zh/pro/i/micro-strategy-cost
II. Summary
"Bear markets make you bankrupt, and bull markets make you poor." Maintaining rationality during market euphoria and withdrawing from the frenzy is much more difficult than buying at the bottom. Currently, only some indicators are showing top-selling signals, which does not mean that the entire market is definitely at the top. If you think the market has a risk of reaching the top, you can also consider:
Set up staged profit-taking levels, don't expect a perfect top.
Convert profits into stablecoins or fiat currencies, rather than shifting to riskier Altcoins.
Sell early at high levels, rather than selling late. Realizing profits is not the end, but the accumulation of ammunition for the next round.
Remember, every top is an opportunity for some to get rich, and a wealth trap for the majority. The market provides equal opportunities for everyone, but those who are prepared are often the ones who seize the opportunity.
