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Predicting the top of a cryptocurrency market cycle is as much an art as it is a science.
There's your Uber driver inquiring about the latest coin, a spike in dodgy popular cryptocurrency projects, or your cousin you see once a year on Thanksgiving sliding into your DMs for cryptocurrency tips.
Here are five tools crypto investors turn to when they dust off their crystal ball every four years. It goes without saying that none of this historical data constitutes a sure guarantee for the future.
Bitcoin halving
No discussion of crypto cycles is complete without reference to the four-year cycle Bitcoin halving It happened.
Roughly every four years, the Bitcoin network halves its reward emissions. Newest half saw net Emissions fell by half From 6.25 to 3.125 Bitcoin.
The halving is the focus of cryptocurrency cycles because it has become a signal of the beginning of greed and speculation in the cryptocurrency markets. Importantly, each cycle tends to peak about 12 to 18 months after the halving:
It's been eight months since the last halving in April 2024, and if history is a reliable indicator, the 2024 cycle still has a way to go.
Google search for "bitcoin"
Hardly a week goes by in the cryptocurrency bull market without this chart appearing on Twitter. It's a dead simple indicator: retail wants to stay current, and Bitcoin is the keyword Google uses to do just that.
The last peak in Bitcoin search interest was in mid-May 2021, about six months before the price of Bitcoin actually rose.
Top cycle indicator
The Pi Cycle Top is a quantitative measure of Bitcoin's price on two moving averages: 111 days and 350 days (multiplied by two).
Subscribers to the Pi Cycle Top indicator believe that the cycle top is when the first intersects with the last. This happened with reasonable accuracy in past Taurus cycles in 2013, 2017 and 2021.
The index is based on a key premise: The end of the bull market is approaching when everyone and their mothers are thinking about getting their hands on the orange coin. This market euphoria pushes prices to unsustainable levels above “normal” growth trends, causing short-term Bitcoin prices to deviate significantly from the long-term.
App Store Rankings
Hypothesis: Beginners use Coinbase instead of Uniswap to imitate cryptocurrencies. The implication: When Coinbase ranks high in the app store rankings, the top of the cycle is near.
Simple enough?
It's a neat qualitative measure of cryptocurrency sentiment, and there are entire groups on Telegram dedicated just to tracking it. Last week, Coinbase ranged from 66th to 135th.
With Solana back in the spotlight, the Phantom Wallet rating has become a popular derivative of this metric. The premise is similar: hash loves Solana memecoins, so they all download Phantom to their phones to trade them.
The big assumption in this measure is that investing in cryptocurrencies remains largely untouched by the mainstream, and with each cycle comes a new wave of retail investors who have never installed centralized exchange apps. If cryptocurrencies are already “mainstream”, this measure loses its importance.
Ethereum:Bitcoin ratio
Ah, the venerable ETH:BTC ratio that podcasters and investors can't help but constantly obsess over.
Here's the idea: investors buy Bitcoin in the early stages of the crypto cycle. Dissatisfied with the profits of the orange coin, they quickly “shift” to riskier altcoins, causing the ETH to BTC ratio to rise.
With ETH sentiment currently at gutterETH: BTC has become a measure of questionable value this cycle. ETH:BTC is currently at a low of 0.034. For context, the ETH:BTC price peaked at 0.075 in 2022, and 0.0109 in 2018.
If history repeats itself, expect the markets to collapse as ETH:BTC approaches its highs.
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