In a recent YouTube video update, crypto analyst Rekt Capital explored the nuances of Bitcoin’s price movements through the PI Cycle Top Indicator, a predictive tool renowned for its accuracy in identifying the peaks of Bitcoin bull runs. This indicator operates by tracking two critical moving averages: the short-term 111-day moving average, represented in orange in the analysis, and the long-term 350-day moving average, shown in green. A significant event within this tool is the “crossover,” where the short-term moving average surpasses the long-term average, historically signaling a Bitcoin market peak within days.
Currently, market data reveals a divergence between these two moving averages, indicating that the conditions for a peak are not yet present. Rekt Capital elaborated, “As these two PI Cycle moving averages are currently diverging from one another, the bull market peak is nowhere close.”
During bear markets or pre-halving years, the 111-day moving average acts as an indicator for bargain buying opportunities, with prices typically oscillating around it. In halving years, such as 2020, it serves as a support level, fostering uptrends leading to new all-time highs. “Any dip below this moving average is a bargain buying territory,” Rekt Capital emphasized in his analysis, noting that Bitcoin is currently trading below this level, around $59,000, marking a potentially attractive buying zone.
Should Bitcoin reclaim the $63,900 level, just above the current position of the 111-day moving average, it could signal the end of the current bargain phase and prompt upward movement. “We are approximately $5,000 away from reclaiming this region. Not much needs to happen for Bitcoin to bounce back and reclaim this region to end this bargain buying opportunity,” Rekt Capital remarked.
The 350-day moving average, another critical component of the PI Cycle Top Indicator, typically comes into play in the latter stages of the market cycle, often serving as a resistance level before significant upward deviations occur. “Upside deviations beyond the green moving average are when we see parabolic price action,” Rekt Capital pointed out, referencing historical surges in 2013 and 2017. The current green moving average is around $96,000, suggesting substantial upside potential before parabolic risks appear.
Rekt Capital’s insights suggest that while Bitcoin has not yet approached the $96,000 mark, historical trends indicate it will, eventually leading to a brief period of rapid price increases. “We are] nowhere close to this green moving average because it resides around $96k, so we’re still almost $30k away from this region …] once we break beyond $96k, the clock starts ticking for the end of the bull run, with only a few months of uninterrupted rallying expected,” the analyst elaborated.
Looking forward, Rekt Capital underscored the importance of monitoring the convergence of these moving averages for indicators of a potential bull market peak. “We need to see a flick up in the Pi Cycle moving average for that crossover to be in place to some degree,” he stated, indicating that a sharp price increase is necessary for a definitive crossover.
At the time of reporting, Bitcoin traded at $58,695.
