Original author: Viee, Biteye
Each bull market not only creates wealth, but also creates countless illusions of wealth. When the market is excited, few people can stay sober and escape gracefully. In the face of a market that soars and plummets, how to exit the market in a timely manner near the high point and avoid asset shrinkage caused by a deep correction requires us to comprehensively analyze multiple market indicators.
In this article, Biteye analyzed 15 commonly used escape indicators and found that one-fifth of the indicators have reached the escape range in 24 years, namely: Bitcoin Rhodl ratio, USDT current account management, and altcoin seasonal index. In this case, how should we deal with the subsequent development of the market?
1. Introduction to indicators
1. AHR 999 Hoarding Index
This indicator was created by Weibo user ahr 999 to assist Bitcoin fixed investment users in making investment decisions based on timing strategies. This indicator implies the rate of return of short-term Bitcoin fixed investment and the deviation of Bitcoin price from expected valuation.
Index range:
>4: It is recommended to significantly reduce the position
1.2-4: Wait and see area, stay alert
0.45-1.2: Fixed investment area, you can gradually build positions
<0.45: Strong bottom-fishing area
Current status: The indicator value is 1.21, which has not yet reached the top and is in a wait-and-see range. It is recommended to remain cautious.
Link: https://www.coinglass.com/zh/pro/i/ahr999
2. AHR 999 escape top indicator
The AHR 999 escape top indicator is a sister indicator of the HODL indicator, specifically used to identify market top areas. The indicator determines whether the market is overheated by observing the degree of price deviation from the long-term trend line. It gave accurate early warning signals at the tops of the two major bull markets in 2017 and 2021, and is an important tool to avoid chasing highs.
Index range:
<= 0.45: Severe overheating, consider escaping
Current status: The indicator value is 2.48, and no peak signal has appeared in this period.
Link: https://www.coinglass.com/zh/pro/i/ahr999-escape
3. Pi cycle top indicator
The Pi Cycle Top indicator predicts potential market tops by comparing the relationship between the 111-day moving average and the 350-day moving average. Historically, when the moving averages cross, Bitcoin’s price is usually close to a cycle top, indicating a potential market reversal.
Signal characteristics:
Two-line crossover: top signal trigger
· Fast divergence: bearish outlook
· Gradual approach: alert
Current status: The two moving averages are still far apart, and no top signal has appeared yet. The next crossover is expected to be in October 2025.
Link: https://www.bitcoinmagazinepro.com/charts/pi-cycle-top-prediction/
4. Bitcoin Rainbow Chart
The Rainbow Chart is an intuitive long-term valuation model that divides the Bitcoin price range into 9 different color bands. The model is based on logarithmic regression and takes into account the long-term growth characteristics and cyclical characteristics of Bitcoin. In the past market cycles, the Rainbow Chart has shown a good guiding role, especially in identifying extreme areas.
Index range:
Red: Bubble area, sell signal
Yellow: Overheated area, stay alert
Green: Healthy zone, holding zone
Blue: Value zone, buying opportunity
Current status: The price is in the green zone, indicating that the valuation is relatively reasonable and no top signal has appeared.
Link: https://www.coinglass.com/zh/pro/i/bitcoin-rainbow-chart
5. Bitcoin terminal price indicator
The terminal price is the transfer price multiplied by 21. The transfer price needs to divide the number of days of coins destroyed by the existing bitcoin supply and its circulation time. This indicator can effectively filter out market speculation factors and reflect the true value of the Bitcoin network.
Signal characteristics: The closer the Bitcoin price is to the red line, the closer the market is to the top.
Current status: Not yet reached
Link: https://www.bitcoinmagazinepro.com/charts/terminal-price/
6. Bitcoin market capitalization
The market capitalization share indicator reflects Bitcoins dominance in the entire cryptocurrency market. This indicator is usually used to judge market cycles and capital flows. When Bitcoins market capitalization share decreases, it usually means that funds begin to shift to altcoins. Historical data shows that changes in Bitcoins market capitalization share often foreshadow turning points in the entire cryptocurrency market.
Index range:
65%: Bitcoin’s strong period
40-65% : Balance period
<40%: Altcoins are active
Current status: The market value accounts for about 60%, which is in a relatively balanced range.
Link: https://www.coinglass.com/zh/pro/i/MarketCap
7. Bitcoin CBBI Index
CBBI (Combined Bitcoin Binary Index) is a comprehensive index that combines multiple technical indicators and on-chain data, and can better identify the turning points of bull and bear cycles. Its advantage is that it reduces the limitations of a single indicator through multi-dimensional data.
Indicator range: greater than 90 means the market has reached a top.
Current status: The index value is 79, indicating that the market is slightly hot, but has not yet reached its peak.
Link: https://www.coinglass.com/zh/pro/i/cbbi-index
8. Bitcoin MVRV Z Index
The MVRV Z index is an important on-chain analysis indicator that determines the market cycle by comparing the degree of deviation between market value and realized value. When the index is too high, it means that the market value of Bitcoin is overestimated relative to the actual value, which is unfavorable to the price of Bitcoin; otherwise, it is underestimated. According to past historical experience, when the index is at a historical high, the probability of Bitcoin price showing a downward trend increases, and we must pay attention to the risk of chasing high prices.
Indicator range: greater than 5 means the market has reached a top.
Current status: The index is 2.5 and has not yet reached its peak.
Link: https://www.coinglass.com/zh/pro/i/bitcoin-mvrv-zscore
9. Bitcoin Rhodl Ratio
The Rhodl ratio is a composite on-chain indicator that compares the behavioral characteristics of coin holders in different periods to determine potential turning points in the market. When the RHODL ratio begins to approach the red band, it may indicate that the market is overheated. Historically, this has always been a good time for investors to take profits in each cycle.
Indicator Range: When it approaches the red band, it may indicate that the market is overheated. When the ratio >= 10000, the market is close to the top.
Current status: Not currently in the red band, however, the indicator entered the topping range during November 2024.
Link: https://www.coinglass.com/zh/pro/i/r-hodl-ratio
10. Bitcoin Mayer Multiple
The Bitcoin Mayer Multiple is a technical indicator used to analyze the state of the Bitcoin market, proposed by Trace Mayer. It evaluates the relative valuation level of the market by comparing the current price of Bitcoin with its 200-day Moving Average (200 DMA).
Index range:
Mayer Multiple > 1: Indicates that the current Bitcoin price is above its 200-day moving average and the market may be overbought.
Mayer Multiple < 1: Indicates that the current Bitcoin price is below its 200-day moving average and the market may be oversold.
Mayer Multiple ≈ 1: Indicates that the current Bitcoin price is close to its 200-day moving average and the market may be in a relatively balanced state.
· Historically, when the Mayer Multiple exceeds 2.4, it usually indicates that the market is overheated and may be due for a correction or bear market. When the Mayer Multiple is below 0.8, the market may be undervalued and may be a good time to buy.
Current status: The index is 1.26, the market is overbought, but has not yet reached its peak.
Link: https://www.coinglass.com/zh/pro/i/mayer-multiple
11. Number of consecutive days of net outflow of ETF
This indicator tracks the flow of funds in Bitcoin ETFs. Consecutive days of net outflows often reflect the confidence of institutional investors. This is a relatively new indicator that has gradually attracted market attention since the launch of spot ETFs.
Signal characteristics:
10 days: Significant bearish signal
5-10 days: Need to be vigilant
<5 days: normal fluctuation
Current status: Continuous net outflow for 1 day, which is within the normal market fluctuation range. This cycle lasts for a maximum of 8 consecutive days, and there has not been a 10-day situation.
Link: https://www.coinglass.com/en/bitcoin-etf
12. ETF’s share of BTC
This indicator reflects the proportion of Bitcoin held by ETFs to the total circulation and is used to assess institutional participation. This indicator can reflect the acceptance and depth of participation of traditional financial institutions in Bitcoin.
Signal characteristics: <= 3.5% is an indicator of escaping the top, which also implies that institutional participation is low
Current status: It accounts for nearly 6%, indicating that institutional participation is in a healthy growth stage.
Link: https://www.coinglass.com/en/bitcoin-etf
13. USDT current account management
USDT current financial management rate is an important indicator to measure the market capital cost. This indicator reflects the overall liquidity of the cryptocurrency market.
Signal characteristics: >= 29% is the escape range
Current status: The interest rate is about 6.68%, which is at a normal level. However, in March 2024, the indicator entered the peak range and reached 65%.
Link: https://www.coinglass.com/zh/pro/i/MarginFeeChart
14. Altcoin Seasonal Index
This indicator is used to determine whether the market has entered an active period for altcoins. By comparing the performance of Bitcoin with major altcoins, it can be determined whether funds are beginning to shift to smaller currencies with higher risks.
Index range:
75: Altcoin season, above 75 means the market is close to reaching a top
25-75: Balance period
<25: Bitcoin Dominance Period
Current status: The index is 41, however, during December 2024 the indicator entered the top range, reaching 88.
Link: https://www.coinglass.com/en/pro/i/alt-coin-season
15. MicroStrategy Cost Metrics
The indicator tracks MicroStrategys average Bitcoin holding cost as a reference benchmark for institutional investors. Since MicroStrategy is one of the largest corporate Bitcoin holders, its cost line often becomes an important psychological price in the market.
Index range:
Current price is higher than cost: Institutional profit range
Current price is close to cost: support level
Current price is below cost: potential buying opportunity
Current status: The average cost of MicroStrategy is about 60,000, which is in the institutional profit range.
Link: https://www.coinglass.com/zh/pro/i/micro-strategy-cost
2. Conclusion
A bear market will bankrupt you, and a bull market will make you poor again. It is much more difficult to stay rational when the market is crazy and to get out of the market when it is crazy than to buy at the bottom. Currently, only some indicators show the signal of escaping the top, which does not mean that the entire market has definitely reached the top. If you think the market is at risk of reaching the top, you can also consider:
Set the points for reducing positions in batches, and don’t expect a perfect top.
Cash out profits into stablecoins or fiat instead of moving into riskier altcoins.
It is better to sell early than late at a high level. Taking profits is not the end, but accumulating ammunition for the next round.
Remember, every top is an opportunity for some people to make money, but it is also a wealth trap for most people. The market gives everyone equal opportunities, but those who can seize opportunities are often those who are prepared.
