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Will you know how to sell Bitcoin when the time comes? Learn how
A highly reliable graphical indicator for identifying bitcoin bottoms and tops reads 75 points. Nodecharts explains what this means
Key Facts:
The "Signals Index" serves as a profitability measurer.
It indicates whether the majority of users are selling at a profit or at a loss.
Few things are more important, during the bullish phases of their cycles, than knowing when to sell bitcoin (BTC). The signals index, a Nodecharts on-chain analysis indicator that indexes multiple metrics into one, can help reliably detect market bottoms and tops.
The signals index serves as an indicator of profitability because it shows the selling behavior of network users, and signals whether they are selling at profit or loss.
As this index reflects historical patterns, i.e. chart behaviors that repeat in a very similar way during each cycle, it is apt to reliably and roughly "predict" the upward and downward extremes of bitcoin's price.
There are considered to be two key marks in this percentile range from zero to one hundred: all values equal to or less than twenty (≤ 20) in a bear market and all values equal to or greater than ninety (≥ 90) in a bull market. A value close to 20 is considered to be ideal for buying and accumulating bitcoin and a value close to 90 is ideal for selling and distributing the asset.
Historical behavior of the signal index and the price of bitcoin
These marks, which seem arbitrary, point to a very simple but very powerful fact: when the Nodecharts signal index catches up with them, something very powerful is coming for the price of bitcoin. More specifically, the end of a trend and the beginning of the price reversal.
Indeed, when the signal index approached or fell below the 20-point level, the price of bitcoin was at cycle lows and shortly thereafter a very strong bull run began. This has happened four times in history: December 2011, February 2015, January 2019 and the last time, December 2022, when bitcoin cost $16,000.
Conversely, when the signal index approached or surpassed the 90-point level, bitcoin's price experienced a bearish reversal shortly thereafter and began to fall to cycle lows shortly thereafter. This happened in May 2011, December 2013, December 2017 and March 2021.
ETH10.27%
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