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Bitcoin Analysis: Pi Cycle Bottom Signals Bottom Formation

 


The Pi Cycle Bottom indicator provided a buy signal. The still quite new indicator should be suitable for determining the next macro bottom of the BTC price. Are we nearing the end of the Bitcoin bear market ?


At the end of June, in one of our bitcoin analysis, we wrote that the next buy signal of the Pi Cycle Bottom Indicator is likely to appear on July 9, 2022. On July 13, 2022, when the Bitcoin price fell to $18,900, the time had come.


On June 18, 2022, the Bitcoin price reached its last low for the year at USD 17,622 (blue circle). After that, the BTC price fell to the next, higher low at USD 18,600 (dark blue circle) on June 30, 2022. So, the indicator's buy signal appeared at the moment when the BTC price formed the third higher low.

The Pi Cycle Bottom Indicator is a simple indicator based on two long-term moving averages: the 471-day SMA and the 150-day EMA. When the 150-day EMA breaks below the 471-day SMA, the indicator gives the buy-signal.


In the past, the indicator has provided three signals (the blue lines). On January 16, 2022, this was the case for the first time. Two days earlier, bitcoin price hit the macro bottom of that cycle at $152.


On December 16, 2022, just one day after BTC price fell to the bottom of the previous bear market ($3,122), the indicator issued the second buy signal.

If the Bitcoin price should really have reached the last bottom on June 18, 2022, then the time interval between the buy signal and the bottom will be significantly longer at 25 days this time.


However, it could also be that in the next 2 or 3 days we will see another strong move down or one last capitulation dump before the BTC price hits the bottom. In this case, the indicator would have “predicted” the bottom almost as accurately as in previous cycles.


Bullish Bitcoin Interpretations

Despite the possible inaccuracies and only two data points of the Pi Cycle Bottom indicator, many analysts presented bullish interpretations for the buy signal. For example, trader @rovercrc compared three bitcoin charts showing the signal and concluded that the bitcoin price is bottoming out.

Analyst @el_crypto_prof published a Bitcoin monthly chart on which he plotted three support lines. In his opinion, the BTC price has already completed an ABC corrective structure and has already bottomed.

According to his forecast, we will see a consolidation phase in the coming months, which will then be followed by another bull market.


Trader @Kwontik  combined two versions of the indicator namely Pi Cycle Bottom and Pi Cycle Top indicator. The latter can be used to determine macro tops. In addition, he used a logarithmic chart and plotted a support line. In his opinion, this support line will not be broken.


However, this support line does not intersect with the points provided by the Pi Cycle Bottom indicator. He plotted these on the lows that followed the all-time lows of the previous bear markets.


Disclaimer

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

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