Bitcoin On-Chain Analysis - Part 2: Market Indicators

INTRODUCTION

In Bitcoin On-Chain Analysis - Part 1: Miners, we focused on the activities of the Bitcoin miners who can add selling pressure to a bear market during their capitulation phase.

In Part 2, we will focus more on the buyers and sellers side of the story, which will be looking into metrics like Moving Averages, Realized Price / Profit / Losses, Unrealized Profit / Losses, etc…

MARKET INDICATORS

[T1] Pi Cycle Top Indicator

Metric Description: the Pi Cycle indicators is composed of the 111 day moving average (111SMA) and a 2x multiple of the 350 day moving average (350SMA x 2) of Bitcoin’s price. This metric shows when BTC becomes significantly overheated (the shorter MA reaches the levels of the larger MA), and has historically been a good indicator for cycle tops.

(Source: Glassnode)

What is a Simple Moving Average?

Simple Moving Average (SMA) is by assigning equal weight to all observations in the period. If we have 50-day SMA, then we will be taking the average price of the past 50 days and giving each day the same weight without any biases for the more recent days.

Here is an example of the current 50-day SMA chart of Bitcoin:

The chart is taking the average of the past 50 days Bitcoin prices.

200W MA

200D MA

Realized Price

MVRV Z-Score (MVRV)

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