Bitcoin Cycle Top Markers

Multiple technical and on-chain indicators, such as MVRV (Market Value to Realized Value) Z-score, Pi Cycle Top, and volume trends, have historically been able to reliably predict when Bitcoin is approaching its peak.

The MVRV-Z score compares Bitcoin's market value to its realized value and adjusts for volatility. A higher Z-score indicates that Bitcoin is significantly overvalued relative to its historical cost basis. When this indicator is at a historical high, the price of Bitcoin is likely to decline.

The Pi Cycle Top uses moving averages to track BTC price dynamics. When the 111-day simple moving average (111-SMA) crosses above twice the 350-day moving average (350-SMAx2), it indicates that the market is overheated. In other words, when the short-term trend catches up with the long-term trajectory, a market top is formed.

Historically, all previous Bitcoin bull markets have begun with a significant surge in MVRV Z-score and ended with the 111-SMA crossing the long-term trend line.

Additionally, a decline in volume during price increases may serve as a warning sign, often indicating a potential weakening of momentum and reversal. The On-Balance Volume (OBV) records cumulative trading volume and is a critical indicator for tracking this process. When OBV diverges from price trends, it typically signals an early reversal.

The second phase of the 2021 bull market is a great example. Despite BTC price reaching a high of $68,000 (compared to the previous historical high of $63,170), the trading volume moved in the opposite direction, dropping from 710,000 BTC to 628,000 BTC. This created a bearish divergence between price and volume, indicating a reduction in market participants supporting the rise—typical signs of weakening momentum.