9 Major Indicators For Determining the Market Trend Turning Point

Bitcoin is about to undergo its latest halving event around the 20th of this month. However, while the price of gold has repeatedly broken historical highs and the price of silver continues to rise, Bitcoin, which has strong hedging properties, is still hovering around $70,000.

Regarding the future direction of Bitcoin, BlockTempo summarizes the following 9 indicator signals for readers to judge Bitcoin’s cyclical trends.

RSI (Relative Strength Index) Divergence

Bonnazhu, a member of the Nothing Research team, shared on X platform last Friday their two most effective technical indicators for determining market trend turning points: RSI divergence and moving average alignment.

RSI divergence is divided into top divergence and bottom divergence. The former refers to when the price reaches a new high but the RSI does not, and even shows a downward trend; while the latter refers to when the price hits a new low but the RSI does not, and even shows an upward trend.

Bonnazhu explains that RSI divergence indicators often precede the market, and the longer the divergence persists and the more frequent it occurs, the stronger the reversal signal.

However, it is also important to note that, in terms of large cycles, RSI divergence at the weekly level is more significant as a reference. In a single cycle, top divergence may experience repeated divergences, while bottom divergence tends to form all at once.

Source: bonnazhu

Moving Average Alignment

Moving average alignment can be divided into bullish alignment and bearish alignment. The former refers to the short-term moving average (5-day moving average) being above the medium-term moving average (25-day and 50-day moving averages), and the medium-term moving average also being above the long-term moving average (100-day and 200-day moving averages), with the overall trend of the moving averages being upward. The latter refers to the short-term moving average being below the medium-term moving average, and the medium-term moving average also being below the long-term moving average, with the overall trend of the moving averages being downward.

Bonnazhu explains that the characteristic of this indicator is that it has a lagging effect. Often, after the bullish or bearish alignment reversal, some time has passed since the market top or bottom, and the trend reversal points appearing in this indicator are called leading upward golden crosses and downward death crosses.

Source: bonnazhu

Duration of Bull Market

Cryptocurrency analyst Virtual Bacon previously stated that based on the past halving cycles of Bitcoin, the duration of this bull market may last until at least the end of 2025. Therefore, regardless of market trends, he plans to exit at that time at the latest.

From Glassnode data, we can see that the trends of the past two bull market cycles are similar. For example, both reached a phase peak about two years after the cycle low point, followed by a rapid decline into a bear market. The current cycle (black line) is in an upward phase, and if compared to the previous two cycles, Bitcoin may reach a new peak by the end of 2025.

Bitcoin 200-day, 21-week EMA

In addition, Virtual Bacon also recommends that investors should pay attention to Bitcoin’s 200-day and 21-week exponential moving average (EMA):

Once the price falls below these two lines, it means that market funds are exiting and a potential bear market is coming.

We can see from the chart below that Bitcoin price is currently still well above the 200-day daily line.

Bitcoin rainbow chart

Bitcoin Rainbow Chart maps the evolution of Bitcoin’s price over time, with colored bands indicating whether Bitcoin is likely to be near a top or bottom.

The closer the price is to the red zone, the more likely it is to reach a top, and the closer it is to the blue zone, the more likely it is to be close to a bottom. You can see in the chart below that when Bitcoin price enters the orange and red zones, the price tends to reverse sharply; currently it is in the “HODL” yellow zone.

Pi Cycle Top Indicator

Pi cycle top indicator uses the 111-day moving average (111DMA, orange line below) and a multiple of the 350-day moving average (350DMAx2, green line below) to predict a Bitcoin top.

When the 111DMA moves up and breaks above the 350DMAx2 line, it is a possible sign that Bitcoin is at or near a top.

Altcoin Boom

In the middle and late stages of the bull market, market funds will gradually overflow from Bitcoin to altcoins and even junk projects. The salient features of this stage are:

• Many altcoins often surge by several times or dozens of times, causing market sentiment to be extremely FOMO.
• The valuation of altcoins is exaggerated, with valuations of hundreds of millions or even billions.
• New projects continue to emerge, with most projects at this time taking advantage of the hot market to fleece investors.

Exchange Bitcoin Reserves

A distinctive feature at the end of the bull market is that a large number of Bitcoins will be transferred to exchanges to take profits, which will also cause the price of Bitcoin to gradually decline.

At present, the amount of Bitcoin reserves in centralized exchanges continues to decline. If the data suddenly increases in the future, it may be a warning sign.

Google Search Trends

This reflects the public’s level of concern about Bitcoin. Generally speaking, when search trends soar, it is also a symbol of the end of the bull market. Many Chinese KOLs have jokingly remarked on social platform X:

When Chinese housewives start asking how to buy Bitcoin, it means the bull market is almost at its peak.

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1. This article originally titled “9 Major Indicators For Determining the Market Trend Turning Point” is reproduced from [blocktempo]. All copyrights belong to the original author [Zhang joy]. If you have any objection to the reprint, please contact the Gate Learn team, the team will handle it as soon as possible.

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