This week, the indicator that marked the bottom of 2015 and 2018 came to light. So is this a sign of the bottom on Bitcoin and a resumption of the bullish trend in the crypto market?
What is the Bitcoin Pi Cycle Bottom?
The Pi Cycle Bottom is an indicator that includes a 471-day simple moving average and a 150-period exponential moving average . The simple moving average is multiplied by 0.745. The result is compared to the EMA in order to predict the bottom. Until then as soon as the 150 period EMA fell below the 471 MA, it marked the end of the bear market for Bitcoin.
For example in 2015, the crossover coincided with the bottom on Bitcoin at around $160 . We then saw a nearly 12,000% bullish rally pushing the price to $2,000 in December 2017.
The second crossover came at the end of the 2018 bear market. This resulted in a 2000% bullish rally this time from $3,200 in December 2018 to nearly $69,000 in November 2021.
A crossing this week for the 3rd time in history
This week, Bitcoin's 150 EMA is close to crossing below the 471-day moving average which would give us the third bottom Pi Cycle in history. The crossover appears as Bitcoin hovers around $20,000 , after a correction of more than 75% from its ATH at $69,000. The BTC/USD pair has been flirting with this level for almost a month, with the latest MLIV Pulse survey noting that its price is more likely to fall towards $10,000 than bounce towards $30,000.
The fears arise due to the more than complicated conditions unfolding in the market, in particular with the failure and bankruptcies of several leading companies . Meanwhile, central bank policies focused on removing excess liquidity from the economy have also spooked investors.
Nevertheless, Bitcoin could rebound to at least $30,000 , if the bottom is well reached. The medium-term upside target coincides with the 0.236 Fib line of the Fibonacci retracement (taken from the $69,000 high to $17,000 low). A first step before potentially aiming higher.
READ: 8 Indicators That Precede A Bitcoin Low (https://brokeredbusiness.blogspot.com/2022/07/8-indicators-that-precede-a-Bitcoin-low.html)
If no indicator alone can determine a market bottom, the latter has proved valuable during previous bear markets. We will carefully watch the next few weeks which will be crucial for Bitcoin and the entire crypto market.
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