Pi Cycle Indicator is divided into two types: Pi Cycle Top and Pi Cycle Bottom. They are often used to identify crypto market tops/bottoms and determine market cycles. The Pi Cycle Indicator identifies Bitcoin market tops/bottoms by observing Bitcoin moving averages on different time periods.

The simple moving average (SMA), also known as the "arithmetic moving average", is a numerical connection calculated from a simple average calculation of prices within a specific period of time. It is one of the basic indicators for observing price fluctuations. For example, the Bitcoin 111 SMA is a simple average of the Bitcoin price over 111 days.

• Pi Cycle Top observes the historical fluctuations in Bitcoin price and identifies market tops through the simple moving averages 111 SMA and 350 SMA. The ratio of these two moving averages is 350 / 111 = 3.153, which is exactly the approximate value of Pi (Pi ≈ 3.142). Simply put, the principle of Pi Cycle Top is to compare the Bitcoin 111 SMA and the 2*350 SMA and look for their overlap points to determine the top of the market.
• Pi Cycle Bottom identifies market bottoms through the simple moving averages 471 SMA and 150 SMA. The ratio between them is 471 / 150 = 3.14. The principle of Pi Cycle Bottom is to compare the Bitcoin 150 SMA and the 0.745*471 SMA and find their overlap points to determine the bottom of the market.

The 2* and 0.745* used in these two indicators were obtained from previous random experiments (which can be understood as reverse reasoning to find patterns). Historically, the crossover points of the SMA multiplied using these two multiples most accurately reflect the lowest and highest points of Bitcoin price. Therefore, they have always been used in Pi Cycle Indicators.

Specific analysis purpose

The overlap between Bitcoin 111 SMA and 2*350 SMA when analyzed using Pi Cycle Top Indicator The overlapping point of 471 SMA and 150 SMA suggests a potential low in the market, indicating that Bitcoin price is about to reach a temporary or long-term peak. lowest value.

• When the 111 SMA moves up and crosses the 2*350 SMA, it means the market is near a top. Bitcoin price is about to peak and start falling. It is a sell signal.
• When the 150 EMA moves down below the 0.745*471 SMA it means the market is nearing a bottom. Bitcoin price is about to reach its lowest point and start to rise. It is a buy signal.

For example, it is obvious from the past four market cycles that when the 111 SMA moves up and crosses the 2*350 SMA, the Bitcoin price peaks and the market enters a top , and then the price began to gradually fall.