Calling the top

[Luthier]

Hello all,
So I thought I would put together a handy guide to top indicators and how to call the top in this Bitcoin bull run.  Here are my personal 5 criteria that I think are relevant for calling a top.  If Bitcoin satisfies 4 out of 5 of these criteria, I will be comfortable in calling a top.

1. Price of Bitcoin approximately doubles within two weeks.  This is a simple one.  Two weekly candles with a doubling in price from wick to wick is historically a solid indicator that we've hit the top.

2.  Bitcoin dominance falls into the 30-40% range amid a face-melting altcoin rally.  https://www.tradingview.com/symbols/CRYPTOCAP-BTC.D/
This happened in 2017 and I do believe it will happen again as retail investors scramble to gobble up anything with a whiff of "crypto" to it.

3. At least one long-term logarithmic target is hit, summed up very well by MasterLuc's latest post: https://www.tradingview.com/chart/BTCUSD/zzbhCPLm-Long-term-targets-approaching/

4. Pi Cycle top indicator crosses.  https://www.lookintobitcoin.com/charts/pi-cycle-top-indicator/

5. Monthly Mayer Multiple exceeds 2.4 for at least one month. https://www.buybitcoinworldwide.com/mayer-multiple/

These are my personal favorite ones but feel free to share yours, and enjoy the spoils of this historic bull run my friends!

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[2double0]

So you think that the party is going to end up soon?
Don't know why, but traders are still taking retailers only under their radar and forgot about the institutions which are the backbone of this rally and the end of this bull season will not be as you are projecting because big wicks still did not do anything (not 2 back to back wicks but the price of btc sextupled in just 6 months as this btc was under $10k in September '20) and the price is breaking new highs and making new records. While this is exciting for us, it is very dangerous for those who are joining this ride now because it will not add up any value to their portfolio at this price if they are a retailer.

Calling the top was not as easy even in 2017-2018 phase when retailers moved btc, then think how hard it is this time when institutions have joined.

[Luthier]

So you think that the party is going to end up soon?

I think it may be in 1-2 months, with another rally possible toward the end of the year depending on how high it goes, but that doesn't really matter.  The point of using these indicators is not to predict when the top is going to happen, it's to help determine when it has happened.

I'm not discounting institutional investors at all, they are what got us to this point.  By and large they are smart(er) money and for the most part I think they've already gotten in at lower prices.  Going forward the steepest part of the parabolic run and blow-off top will be driven by retail FOMO following on the heels of those institutional investors, because there simply aren't any coins left to sell on retail exchanges.  I firmly believe there will be more institutions selling than buying at, say, $150K, IF the price has just doubled in the past two weeks.  They're not stupid.

[magneto]

These are my personal favorite ones but feel free to share yours, and enjoy the spoils of this historic bull run my friends!

I doubt that any amount of TA would be able to predict the top with any sort of accuracy.

People are completely irrational especially when it comes to a market that is as speculative in the short run as crypto. They don't look at charts, Bollinger bands, moving averages and decide to stop buying at a particular instant.

When bad news hits, the top can hit without triggering any of the indicators that you mentioned in OP. Likewise, when the market sentiment is extremely bullish, markets could rally quite substantially past any of these triggers.

Just hedge all your bets to an extent if you are a short term speculator with the necessary stop loss, and keep on holding if you're a long term investor. It's as easy as that.

[Luthier]

These are my personal favorite ones but feel free to share yours, and enjoy the spoils of this historic bull run my friends!

I doubt that any amount of TA would be able to predict the top with any sort of accuracy.

Once again, these indicators are not intended to predict a top.  They are useful for identifying when a top may have occurred.

[UnDerDoG81]

I agree with you. I think we will have a (probably 6 digit) top within a month, a sharp drop, sideways through summer and than an insane rally at the 4th quarter of the year.

Looking at the NUPL chart I think the last correction was simply not enough to have a long lasting bullrun. PI cycle top indicator is also close to crossing. I think hope we see something similar like in 2013.

I also think that institutional investors do not have a lot of impact on the market yet as people describe. Some guys talking about a supercycle. We heared that in 2017 as well "this time it's different". The biggest fish Michael Saylor owns "only" about 0.5% of all Bitcoins. Even if he holds 10 years, it just needs a few whales to massively dump the price.

[crwth]

I like the third one since I saw the actual chart there. I believe also in the prediction set in MasterLuc (?) or PentarhUdii in TradingView. It's better to check the higher time frames. I do hope that the targets of $100k and $180k will be reached hoping that we continue with this kind of influx of institutional investors and retail investors as well.

Thanks for sharing this. I wondered a while ago what I'm going to do if "this might be the top, should I cash out" type of feeling.

[Luthier]

I like the third one since I saw the actual chart there. I believe also in the prediction set in MasterLuc (?) or PentarhUdii in TradingView. It's better to check the higher time frames. I do hope that the targets of $100k and $180k will be reached hoping that we continue with this kind of influx of institutional investors and retail investors as well.

Thanks for sharing this. I wondered a while ago what I'm going to do if "this might be the top, should I cash out" type of feeling.

Sorry about the other links, I think they should be fixed now  And yes, PentarhUdii was once known as "masterluc" here on this forum.

[Luthier]

I agree with you. I think we will have a (probably 6 digit) top within a month, a sharp drop, sideways through summer and than an insane rally at the 4th quarter of the year.

Looking at the NUPL chart I think the last correction was simply not enough to have a long lasting bullrun. PI cycle top indicator is also close to crossing. I think hope we see something similar like in 2013.

I also think that institutional investors do not have a lot of impact on the market yet as people describe. Some guys talking about a supercycle. We heared that in 2017 as well "this time it's different". The biggest fish Michael Saylor owns "only" about 0.5% of all Bitcoins. Even if he holds 10 years, it just needs a few whales to massively dump the price.

I think we're on the same page...obviously none of this is 100% but it's fun to speculate and see what happens.  No matter what, if you're interested in taking some profit in USD, and you do so based on 4 out of 5 of those indicators going off, in my opinion you can't be making too huge of a mistake by selling some at that time.  It's nigh impossible to catch the exact top of any given wave but you shouldn't be too far off if those conditions are met.

[mk4]

I personally don't think that calling the top using point #1 and #2 is quite accurate. Because while I don't like being the guy to say "this time it's different", I think the statement "past performance is not indicative of future results" is strongly at play here.

I'll still give you a merit though, because at least you've given us an actual hypothesis rather than the typical "price $x is the top because I think so".

[adaseb]

Best way to call the top and get out at the highest price is as follows.

Wait for a ~45%+ correction. When this happens, assume that ATH won't break. Plot some fibonocci from the ATH down to the pivot low, and sell all your BTC at either the 0.50 or 0.618 fibs.

If you look at the top in 2011, 2013 and 2017, you would of actually been able to get out at a good price on the 0.50 or 0.618 fibs. So if you followed this rule in 2017, you would of gotten out at $16.3K which would of been a great price since it was the highest high for 3 years. Nobody knew that $19.5K would be the top or sold anywhere near it.

[pooya87]

1. Price of Bitcoin approximately doubles within two weeks.  This is a simple one.  Two weekly candles with a doubling in price from wick to wick is historically a solid indicator that we've hit the top.

This is a very weak indicator in my opinion because historically speaking "approximately double in about 2 weeks" is not as rare as you'd think. For example during 2017 we had at least 2 cases where price doubled in about 2 weeks. From $4400 to $8500 in May 2019, and from $7000 to $13900 in June 2019. Or the $3700 to $7400 in April 2020.
There is a lot more cases.

2.  Bitcoin dominance falls into the 30-40% range amid a face-melting altcoin rally.  https://www.tradingview.com/symbols/CRYPTOCAP-BTC.D/
This happened in 2017 and I do believe it will happen again as retail investors scramble to gobble up anything with a whiff of "crypto" to it.

I disagree with this completely and call it a wrong indicator. Simply because this has nothing to do with bitcoin and its bubble. This is all about how many shitcoins are created and how well they are pumped. Whether or not bitcoin is at its top doesn't change that.

3. At least one long-term logarithmic target is hit, summed up very well by MasterLuc's latest post: https://www.tradingview.com/chart/BTCUSD/zzbhCPLm-Long-term-targets-approaching/

This is meh!
Long term targets differ a lot based on how you want to analyze the market. For a lot of people $40k was the long term target. Some had $50k, some $100k, some $500k and some $1million. All of the backed by a lot of bent TA.
MasterLuc was predicting lower than $10k for the top in 2017, then he brought it up to $15k as we got closer to $10k. It seems like a repetition of 2017?

I have to read more about 4&5, have not much to say although I didn't like them at first look.

These are my personal favorite ones but feel free to share yours, and enjoy the spoils of this historic bull run my friends!

My favorite is looking at the historical cycles that bitcoin has. The ENTIRE  cycle though, meaning from the time it starts to fall from the bubble to the time it reaches the bottom and then until it reaches the next bubble.
That tells me price this time won't reach top before at least $400k.

[hugeblack]

We are in the midst of a new Bitcoin cycle, the problem lies in determining the length of this period, ATH we will witness and an 80% correction when it will happen and to where it will lead us in the price.
All the variables you mentioned do not satisfy the answer to any of the above questions. Therefore, optimism based on that premise is not considered useful or valuable.


Bitcoin's dominance is an indicator of how investments will flow into the cryptocurrency market. Is it for know sell bitcoin or buy Altcoin (all altcoins)

[Luthier]

People seem to think that either an indicator is a sure thing or it's worthless, which is a very silly argument.  Nothing is a sure thing, it's a game of percentage probabilities and educated guesses.  Obviously no one of these indicators is foolproof or close to it, which is why I'm looking for at least 80% of them indicating a top, before I am confident that it's not a big mistake to take some profits.

adaseb has a great one!  I've thought about that a lot too and it should probably be on the list.

[Febo]

Calling the top

Top will happen 4-7 months from now. It is way way way to early fro bull run to stop here. Price is only x3 from old ATH 3 years ago. Eventually we will have to get ready for the 2 year of bear market. But not just yet!

[Upgrade00]

People seem to think that either an indicator is a sure thing or it's worthless, which is a very silly argument.

It's a public forum, you put your opinion on where you think the price is going and other members can disprove or support that, based on their own perspective, that in itself is not a silly argument.

which is why I'm looking for at least 80% of them indicating a top, before I am confident that it's not a big mistake to take some profits.

That's your perspective on the market and it's perfectly fine if you intend on taking profits based of your criteria. After the bull run we've had, hardly anyone would be making a mistake taking out some profits now, if you always look to higher prices then you probably would never sell, I personally prefer believe in the technology to be the reason for long term investment and not simply hope for more profits.

[crwth]

adaseb has a great one!  I've thought about that a lot too and it should probably be on the list.

Upon recreating what he said for calling the top, it's a great way to execute if you believe that "that" is the top.


For Visual representation of what adaseb has discussed



I think everyone should know that everyone that is trading and making predictions is a speculator.

[pooya87]

People seem to think that either an indicator is a sure thing or it's worthless, which is a very silly argument.  Nothing is a sure thing, it's a game of percentage probabilities and educated guesses.

In my view there is a big difference between "inaccurate" and "irrelevant" when it comes to market indicators.
Inaccurate is for example speculating price reaching $68k while it barely reached $62k 3 days ago which was a correct speculation nontheless.
Irrelevant on the other hand is saying number of altcoins has anything to do with bitcoin price.

[Gozie51]

adaseb has a great one!  I've thought about that a lot too and it should probably be on the list.

Upon recreating what he said for calling the top, it's a great way to execute if you believe that "that" is the top.


For Visual representation of what adaseb has discussed



I think everyone should know that everyone that is trading and making predictions is a speculator.

Are you saying price is going to drop this way after the top was predicted by Op about a month to come? Maybe you need to come up with better clarification or if you know what level price will drop. I remember is prediction and speculation anyway.

[STT]

Seems logical, depends on what time frame you mean to call the top.   We can top in March and make a new high in summer without it being that big a deal.   Top for the year would be something of a larger call Im looking for that but not sure yet

Right now price is capped by weekly average, I dont think its bearish especially too much