Here is an explanation for the friends of Binance. I have serialized this article on Weibo before. Today I suddenly thought of updating it to prepare Binance as the launch platform. The following content is separated by dotted lines. The content written each time is currently in the third edition. The following is the full content of each time.
When I started writing a series of articles in the bottom -up guide, I was actually very resistant, because the current market has not yet reached the point of writing the bottom guideline, but he always comes, just like me here. At this moment, I still firmly believe that the bull market has not yet reached its top, and the bear market will surely come quietly.
Therefore, it is always good to make preparations in advance. Today, we will start the guide to escape from the top of the bull market and the guide to the bottom of the bear market, so that you can be friends with the multi-military air force (although I hate the air force, but this is the law of the market)
Let’s start the text:
1. When it comes to bargain hunting, the first thing that comes to mind, and the one that has to be mentioned, is the 9-god index "ahr999 index"
When the price of Bitcoin is lower than both the short-term fixed investment cost and the expected valuation, increasing the investment amount can increase the probability of user income. According to the indicator backtest, when the indicator is lower than 0.45, it may be suitable to buy the bottom, and when the indicator is between 0.45 and 1.2, it may be suitable for fixed investment in BTC. If it is higher than this range, it may not be a good time for fixed investment.
Judging from the entire historical cycle of Bitcoin, when the index is below 0.45 and below the bottom line, it is a very good opportunity to buy bottom.
如果当下想要抄底的话，可以参考一下目前0.45对应的价格，大概在2.12万左右，也就是说，当比特币价格低于2.12万以下时，进入了抄底区间，可以考虑分批抄底。
2. The second one is of course the famous rainbow table. This table divides the price range of Bitcoin into 9 color ranges. The lowest blue is a Bitcoin sale, and the highest red is a bubble with the greatest risk.
The rainbow table is one of the few indicators among all indicators that has experienced a complete bull-bear cycle, so it is highly reliable.
It is obvious from the picture that the dark blue part is "Basically a Fire Sale", which translates as "big sale". Basically it is the bottom range. When it reaches the blue range, you can consider buying the bottom.
We assume, remember, we just assume that it reaches the blue zone at the end of 2021, and the price is about US$15,770, so we can consider bargain hunting in batches. However, if it reaches the blue zone as time goes by, the price will be raised accordingly, and the corresponding bargain hunting price will be will be lifted up
3. The third bargaining indicator to be introduced is the "200 Week Moving Average Heatmap". The Chinese translation is called the 200 Week Moving Average Heatmap.
Let’s briefly talk about the lines in the picture:
The gray line represents the price of BTC
The purple line represents the 200-week moving average
The small dots above represent the monthly growth rate of the 200-week moving average, and the direct interval between each small dot is 1 month.
This indicator uses a colored heat map based on the percentage growth of the 200-week moving average. Each color is assigned to the price chart based on the percentage growth of the monthly 200-week moving average.
What the indicator means is that in every major market cycle, the price of Bitcoin has bottomed near the 200-week moving average, as you can see in the chart below:
Therefore, when reaching the 200-day moving average, you can consider buying bottoms in batches.
Based on the current 200-day price of 13,700, if it reaches the bottom, it will probably be around 15,000-16,000.
Summary of Bear Market Dip Buying Guide 1.0
1. When the AHR999 index is lower than 0.45 and below the bottom line
2. When the rainbow table enters the dark blue area
3. When reaching near the 200-week moving average
This has reached the area of bargain hunting. You can buy bargains in batches according to the situation.
That’s all for today. See you in our Bear Market Dip Hunting Guide 2.0! ! 👋
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Today is August 4th, the weather is so hot that the currency price has now risen to 42,000 and then dropped back to around 38,000.
Today's update of the article does not mean that I am bullish at the moment. Buying the bottom and escaping from the top are relative concepts. Only by letting everyone know how far away from the bottom are we can better improve the overall macro understanding.
Without further ado, let’s get started.
The indicator we are going to introduce today is called in English: “Cumulative Value-days Destroyed” Abbreviation: CVVD
The Chinese name is translated as: "Cumulative value days destroyed", which is very difficult to understand. It will be explained in detail below.
Cryptocurrency analysts shared an experiment after analyzing the relationship between Bitcoin’s price action and the time value associated with how long investors hold Bitcoin:
Let’s start with the formula:
Its meaning is: when one hodler sells to another hodler, the value/price (USD) of the traded currency at the time of the transaction is multiplied by the length of time the previous Hodler held the currency. CVDD is the cumulative sum of value and time damage for each on-chain transaction. (It can be understood as the sum of the products of all on-chain transaction prices and the last hodler holding time)
The denominator is divided by 6,000,000 to find a calibration factor. A simple understanding is to make the designed curve conform to the lowest point of currency prices in history.
Take a look at Figure 1 below. The green line in the picture is CVDD. Every position pointed by the arrow accurately marks the bottom of Rock Tang Orange.
The picture above is the picture when the indicator was first created in 2019. Let’s take a look at the picture below. Until today, CVDD has accurately identified the bottom at 312.
Of course, it is also obvious from the picture where we are now and the distance to the bottom.
Summary of Bear Market Dip Buying Guide 2.0
1. When the AHR999 index is lower than 0.45 and below the bottom line
2. When the rainbow table enters the dark blue area
3. When reaching near the 200-week moving average
4. When the price reaches near the CVDD line
This has reached the area of bargain hunting. You can buy bargains in batches according to the situation.
That’s all for today. See you in our Bear Market Dip Hunting Guide 3.0! !
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Today is September 19, 2023, the weather is sunny
Family, brothers, veterans,
When I just saw the creation time of this article, it really shocked me.
Unconsciously, a full two years have passed! ! !
Two years! ! Two years! ! Do you know how I have spent these two years?
I hope we can meet again in the next 2 years😄
Let’s start the text:
This time, after two years, I opened the headlines again, ready to chat and chat with the big guys again.
This time I will simply chat a few more words and update more content. I don’t know when the next time will be.
In fact, updating this article at this time also has special significance, because judging from the current price, the market has most likely completed a bottom-building process, which is the process of bottoming at 15,000. Then when you go back and summarize the various indicators, it will be very clear who is right and who is wrong, who is accurate and who is wrong. It will be very intuitive. In this update, I have compiled a total of 6 important bargain hunting indicators! ! !
Let me make an explanation in advance. I will list and explain each indicator one by one later.
1. Miner shutdown price
2.Hash Ribbons
3.RHODL Ratio
4.Bitcoin relative strength index（RSI）
5:Fear And Greed Index
6.MVRV
Let's start from the first one
1. Miner shutdown price indicator
This indicator is actually very easy to understand. In layman's terms, when the electricity bill for a miner to start mining is higher than the selling price of the mined pie, some miners with low risk resistance will seek to exit and stop losses. . Mining machines will be shut down in large quantities, because they will lose money (electricity bills) when they are turned on.
And when these miners quit, they often sell the pie for cash and sell mining machines at reduced prices, causing the price of Bitcoin to fall further. This phenomenon can also be called miner surrender.
So let’s put it another way: from the surrender of miners, we can actually see the signal of the market bottom. After small and medium-sized miners are eliminated, the remaining capable miners with strong risk resistance will choose to avoid selling in low-price areas. Even if they shut down, they will not sell the big pie immediately, because there is no need to sell the big pie to pay the electricity bill after shutting down. .
From this year’s bottom of 1.5, we can see that in fact, most of the mining machines below 15,000 have entered or are close to the shutdown price of the mine. Historically, being near or below the shutdown price is definitely a very important bottom information indicator.
The figure below shows the approximate range of shutdown prices for mainstream mining machines.
2. Hash Ribbons (Hash Ribbons)
As mentioned earlier, the closing price indicator of the miners can be mentioned here, and another indicator Hash Ribbons (hash belt) associated with the miner can be mentioned. Hash Ribbon is a tool to measure miner surrender. It is composed of two simple moving averages (SMA, Simple Moving Average) of 30 days and 60 days of the hash rate of the entire network. When the 30-day SMA is lower than the 60-day SMA, it means that miners’ capitulation has begun and the market is bearish. Indicated in pink. When the 30-day SMA rebounds and crosses the 60-day SMA again, it means that the dark period has passed, the recovery period has begun, and the market is bullish.
It seems that this indicator is not very accurate every time, but we can take a look at it from another statistical analysis.
If you use this strategy to buy the big pie, the maximum retracement and peak return of each time in the past: most of the time it still looks very good
3. RHODL Ratio
I have introduced this indicator in detail in the "Bull Market Escape Guide". Here I will directly copy what I wrote before.
Overview of indicators:
This indicator uses the ratio of the realized value HODL waveform.
In summary, the "realized value" HODL waves are different ages of UTXOs (coins) weighted by the "realized value" of the coins within each band.
The actual value is the price of the UTXO (coin) when it was last transferred from one wallet to another.
RHODL Ratio Look at the ratio between the RHODL band for 1 week and the RHODL band for 1-2yrs.
It can also add hodl's losses over time by multiplying the ratio by the number of market days (number of days) and can also be corrected for lost coins.
When 1-week prices are significantly higher than 1-2 years, it is a sign that the market is overheating.
To explain it in layman’s terms:
This indicator is able to identify Bitcoin’s previous highs in each macrocycle with a high degree of accuracy.
It determines the market's highest accuracy within days.
The RHODL ratio moving into the red line indicates that the market is approaching the top of its cycle. Historically, this has been a great time for investors to take profits in every cycle.
And the most awesome thing about this indicator is that
Unlike other on-chain indicators, the RHODL ratio did not signal a false cycle high in April 2013. This gives it a unique advantage over other on-chain indicators! ! !
Similarly, when this indicator points out the top of the cycle, it will also point out the bottom area of the market based on the characteristics of the indicator.
As for you saying you don’t know where to buy lows in the green area, I can tell you that as long as you enter the green area and start buying lows in batches, you will most likely be right.
4. Bitcoin relative strength index (RSI indicator)
该指标由 J. Welles Wilder Jr. 开发，并在他 1978 年的开创性著作《技术交易系统新概念》中介绍。
相对强弱指数（RSI）是技术分析中使用的动量指标。RSI 衡量证券最近价格变化的速度和幅度，以评估该证券价格的 高估或低估情况。
你要是问我他的深入原理是啥？抱歉，我也是真的看不懂这个东西，下图是他的公式，如果有看懂的给我解释一下
But we can change the angle and use the perspective and language of ordinary people like you and me to describe RSI:
Each point on the chart represents a month and its score is evaluated relative to the previous 12 months. Traditional usage of the RSI suggests that values of 70 or above indicate that Bitcoin is overbought and has most likely reached top territory. An RSI reading of 45 or below indicates that Bitcoin is oversold and has most likely reached bottom territory.
五、Fear And Greed Index （恐惧和贪婪指数）
This indicator is also very easy to understand. Buy when the market is overly fearful and sell when the market is extremely greedy. As the saying goes, when others are fearful, I am greedy, and when others are greedy, I am fearful.
Inputs to the Fear and Greed Index are generated daily from several different sources.
They include:
The volatility of current pie price movements relative to the past 30 and 90 days. Unusual increases in volatility can sometimes be a sign of excessive panic in the market.
Momentum and volume relative to the last 30 and 90 days. Unusually high relative buying volumes could be a sign that the market has become too greedy.
Social media sentiment analysis looks at the type and amount of sentiment at a specific time relative to historical norms.
The dominance of the pie relative to other cryptocurrencies.
Google Trends covers a range of related Bitcoin search terms to identify periods of strong growth or decline in Google searches.
Judging from the historical charts, fear and greed generally reach around 15 or below, which basically reaches the bottom area.
But as you can see from the picture, the lowest fear and greed index in this round is 6, but the price corresponds to 19,000, and when the lowest is 15,000, the greed index corresponds to about 20. Therefore, this indicator also has a certain error range and can be used in conjunction with other indicators.
6. MVRV Z-Score indicator
Actually MVRV = Market Cap / Realized Cap, this place can explain this concept a little bit.
Market Cap: Market Cap is a measure of an asset’s current valuation, i.e. the total value of the entire token portfolio in USD
Realised Cap: The price of each pie is used when it was last moved, that is, the price when it was last sent from one wallet to another (roughly meaning purchase). It then adds up all these individual prices and takes the average. This average price is then multiplied by the total number of coins in circulation.
MVRV-Z has historically been very effective at identifying periods when market value is higher than realized value (overbought). These periods are highlighted by the z-scores (red lines) that go into the pink box and represent the top of the market cycle. It is able to pick the market top of each cycle within two weeks.
It also shows when the market value is well below the realized value (oversold), highlighted by the z-score going into the green box. Historically, buying Bitcoin during these times has yielded huge returns.
Okay, I have written so much today that I have almost used up all my brain cells.
Now comes the familiar summary link
Summary of Bear Market Dip Buying Guide 3.0
1. When the AHR999 index is lower than 0.45 and below the bottom line
2. When the rainbow table enters the dark blue area
3. When reaching near the 200-week moving average
4. When the price reaches near the CVDD line
5. When the miner shutdown price reaches close to the miner shutdown price
6.Hash Ribbons When the pink strip area appears
7. When the relative strength index (RSI) indicator reaches below 45
8. When the fear and greed index reaches below 15
9. When the MVRV-Z indicator reaches the green zone
This has reached the area of bargain hunting. You can buy bargains in batches according to the situation.
Cherish your low times and you will see a lot of truth. Those who can make it through time are those who are willing to make it through themselves. No one's life is smooth sailing. The suffering in the trough period is to accumulate strength. Even if it is the light coming out of the cracks, we must hold on tightly, and then give birth to the spirit of death. courage.
That’s all for this issue, see you in our Bear Market Dip Hunting Guide 4.0! !
