Today I want to focus on 2 fundamental metrics that aim to call Cycle Tops and Cycle Bottoms in Bitcoin:
Calling Bottoms
Through the analysis of the USD equivalent Bitcoin Mining Revenue, we can forecast future bottoming areas.
When Bitcoin topped in 2013 at $1163, it set the bar for the mining income level around $5.1M a day. And it's meant to be expected that the next BTC cycle 2017-2019 should bottom around a price range that generates this kind of daily mining revenue. This rule has been fulfilled during all the cycles since 2011 with no exception.
Well, we know that a bottom between $2500-$3000 would fulfill that condition.
Does it mean that BTC cannot move beyond that? Not at all, but certainly it hints that a move below might happen quickly because we would be trading at zones below value.
Looking at the Puell Multiple, one might think that the bottoming already happened. Certainly, we're missing significant volume, a significant bounce and the institutional blueprint. But looking at the facts, this indicator has a 100% track record at calling cycle bottoms. Is this time different?
Calling Tops
The Puell Multiple also works as a proxy for calling Bitcoin Cycle Tops. The metric is pretty simple:
Looking forward we'll know that we are about to top, once we exceed 5x-10x the average mining revenue from the last 365 days.
Calling Bottoms
Through the analysis of the USD equivalent Bitcoin Mining Revenue, we can forecast future bottoming areas.
When Bitcoin topped in 2013 at $1163, it set the bar for the mining income level around $5.1M a day. And it's meant to be expected that the next BTC cycle 2017-2019 should bottom around a price range that generates this kind of daily mining revenue. This rule has been fulfilled during all the cycles since 2011 with no exception.
Well, we know that a bottom between $2500-$3000 would fulfill that condition.
Does it mean that BTC cannot move beyond that? Not at all, but certainly it hints that a move below might happen quickly because we would be trading at zones below value.
Looking at the Puell Multiple, one might think that the bottoming already happened. Certainly, we're missing significant volume, a significant bounce and the institutional blueprint. But looking at the facts, this indicator has a 100% track record at calling cycle bottoms. Is this time different?
Calling Tops
The Puell Multiple also works as a proxy for calling Bitcoin Cycle Tops. The metric is pretty simple:
Looking forward we'll know that we are about to top, once we exceed 5x-10x the average mining revenue from the last 365 days.
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