PCTR - Pi Cycle Top Risk [Logue]

22 Feb 2024

Pi-cycle Top Risk (PCTR) - The PCTR indicator uses divergence of the Pi-cycle top indicator display the risk that a macro top in Bitcoin (BTC) is near. The Pi-cycle top indicator is simply the cross of the 111-day moving average above a 2x multiple of the 350-day moving average of the BTC price. While there is no fundamental reasoning behind why this works, it has worked to indicate previous bitcoin tops by taking advantage of the cyclicality of the BTC price and measurement overextension of BTC price. This indicator triggers a top signal when the fast moving average (111-day) crosses above the 2x multiple of the slow moving average (350-day).

What's interesting is the indicator can also signal a bottom when the divergence of the fast moving average is at an extreme versus the slow moving average. The indicator signals a bottom when the fast MA is 66% away from the slow MA value.

Both the top and bottom signals are clearly shown on the chart on a scale from 100 to 0.

22 Jan

Nota Keluaran

The Pi-Cycle Top positive deflection, i.e., the fast MA above the slow MA, has decreased each BTC cycle. Therefore, it is logical to think that these moving averages may not cross. If this occurs, a top based solely on the cross will not be triggered. Therefore, I added a sloped line to the indicator to capture the diminishing deflection, and the potential of the two Pi-cycle MAs not crossing this cycle. This sloped line may still signal a BTC cycle top even if the Pi-cycle MAs don't cross. The indicator allows manipulation of the slope and intercept of the sloped line. The bottom triggers may also be better fit using a sloped line, but that is for another update.

The crosses are visualized via the dark red signal and the deflection "danger zone" is visualized via the less dark red.

--Da_Prof

22 Jan

Nota Keluaran

Note that the light blue line now represents a transform of the Pi-Cycle Top Deflection and the purple dashed line represents the Pi-Cycle Top Risk, which is used for the Bitcoin Top Indicator risk metric.

--Da_Prof