Is Bitcoin price close to a cycle top? — 5 indicators that help traders decide
As Bitcoin approaches the end of its current market cycle, several indicators can help traders identify potential price tops. Key indicators include the MVRV-Z Score, Pi Cycle Top, trading volume trends, Puell Multiple, and exchange inflows, which have historically been reliable signals of impending market peaks. The MVRV-Z Score compares Bitcoin’s market value to its realized value, a high score indicating overvaluation and suggesting a price drop may follow. The Pi Cycle Top uses moving averages to signal overheating. Furthermore, declining trading volumes during price increases may indicate weak momentum, leading to reversals. Profit-taking metrics, such as the Puell Multiple, gauge miners' revenue and their selling behavior near market tops. Additionally, large exchange inflows often signal impending distribution. Traders can examine past market behavior, noting that price action and volume diverging can indicate a reversal. The final stages of a bullish trend may also align with significant sell zones, typically around 15% below previous all-time highs. Recognizing these signals can be crucial for profit-taking before a market downturn occurs.
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