Life-saving market: Analyzing the most bizarre Double Top in 2021 with on-chain data

Key Points：

• Review the market structure of the 2021 Double Top
• Discuss from three perspectives: URPD, STH-RP, Realized Profit
• Will the 2021 Double Top structure reappear?

Definition of Top?

Before discussing today's topic, we need to first define "what is a top".

In April 2021, BTC price dropped from around 65k, with a maximum decline of about 55%; if you think "this is the top", then escaping at that time would be a reasonable decision; if you think "the second top is the top", then indeed there was no need to escape in April.

My personal view is: April at that time was the top.

Because no commodity market's beta drops more than 55% after seeing the top. From the on-chain data perspective, multiple top signals had already appeared before April 2021; as for how to view the second top in 2021, I will share my own bias in the later part.

2021 Double Top Data Review

Realized Profit

For easy observation, I will present Realized Profit using a 7-day moving average:

At the first top in 2021, a very obvious warning signal appeared: Divergence.

As marked by the three blue marks, as the price became higher, Realized Profit became lower.

And at the second top in 2021, there was again a massive Realized Profit, but it's worth noting that the volume was relatively smaller compared to 2021.

1. Chips below 19k are being massively distributed
2. High-priced chips are being flattened, not as concentrated as the first top

Will the Double Top Structure from 2021 Reappear?

Many people ask: "Will this cycle produce a Double Top similar to 2021?"

Honestly, no one can predict price trends, and trading is more about planning and simulating scenarios.

If a Double Top structure similar to 2021 emerges in the future, there will certainly be signs of a "staged bottom" between the two tops (similar to July 2021),and at that time, data will certainly provide signals.

That's today's sharing, hope it helps you, thank you for reading.