- The Pi Cycle Top Indicator is showing a price reversal after three months of downtrend
- This pattern typically indicates that a new Bitcoin cycle is beginning
- The Pi Cycle Top Indicator has a reputation as being able to pick a Bitcoin peak
The Pi Cycle Top Indicator wasn’t really discussed in the crypto space until earlier in the year when its accuracy in marking cycle tops was seen as a way of predicting when the 2020/21 top would occur. Incredibly it did just that, with the Pi Cycle Top Indicator crossing just days before Bitcoin topped out at $65,000 in April. This has led many to swear by the Pi Cycle Top Indicator as their marker for the end of a bull market, which could turn it into a self-fulfilling prophecy. After three months of downtrend the indicator has just signalled that a new Bitcoin cycle is underway.
Pi Cycle Top Indicator Marks Bitcoin Cycles
In truth the Pi Cycle Top Indicator is a correlational indicator rather than being anything causal, but what we can certainly see from its current status is that a new Bitcoin cycle has certainly begun following the April crash:
As we can see throughout history, each cycle top (where the green and orange lines cross) has been followed by a bear market where the orange line (the 111-day moving average) has dipped severely with price and deviated hugely from the green line (350-day moving average). The end of the bear market is illustrated by a bottoming out and upward curve of the orange line, which indicates that price is moving in a consistently positive direction.
The most recent examples of this are late 2015, early 2019, and mid 2020. On each occasion the reversal led to a bull run, with the Bitcoin price topping out magnitudes above each reversal point months or even years later.
Bitcoin On the Up
Now let’s take a look at what’s happened in the last few weeks as Bitcoin bounced from $39,000:
Here we can see a sharp reversal at the start of September, ironically as Bitcoin was about to be hit by the September curse. This reversal on the Pi Cycle Top Indicator, combined with the spectacularly bullish price action since September ended, is a clear indication that we have entered a new Bitcoin cycle.
Where the Pi Cycle Top Indicator tops out this time round is, of course, anyone’s guess, but it’s clear that somewhere north of $100,000 is where we should expect the cross to happen this time round. The question of whether the indicator will act as another self fulfilling prophecy again is also intriguingly unknown, but at this point it would be foolish to at least consider the possibility.