4 Onchain Indicators You can Use to Predict the Market

Top 4 On-chain Indicators to Predict Market Tops and Bottoms 

Crypto's volatility can be brutal.

That’s no secret.

Here's your primer on some easy-to-use onchain charts to help you understand if the market is oversold or overbought.

1️⃣ Puell Multiple

Your go-to for buying or selling Bitcoin. It's all about monitoring miners' activity and profitability.

• Puell Multiple > 5 = You should be selling 75%+ of your BTC portfolio. Furthermore, you must set sell orders for your altcoins, as they often pump after BTC pumps.

• Puell Multiple > 2.5 = You should sell up to 25%+ % of your BTC/alts on upward moves. This will give you a lot of capital to buy back during capitulation events.

• Puell Multiple 0.6 - 2.5 = Ideally, no trade zone. You chill here. If you want to benefit from volatility, you can trade with less than 5% of your portfolio.

• Light green (Puell Multiple > 0.4 - 0.6) = You can dollar cost average (DCA) in a bit, but it’s better to save your capital for when the Puell Multiple goes below 0.4

• Puell Multiple < 0.4 = Buy as much as you can afford to lose. Capitulation events are incredibly profitable buys at these levels as you have better odds.

2️⃣ The Investor Tool by Philip Swift

Simplify market tops and bottoms with two moving averages (MA).

This one is easy to understand; anyone can see if it’s a good time to buy or sell.

The hard part?

You need to be patient when buying or selling.

Here’s how you use it:

BTC price < 2-year MA → When the price is trading below the 2-year moving average, it has usually been profitable to DCA into BTC and other blue-chip cryptocurrencies.

BTC price > 2-year MAx5 → When the price is trading above the 2-year moving average x5, it has often been a historical signal that the market has reached the top of the cycle.

When this happens, you should aggressively DCA out of your positions and shift your portfolio to be more off-risk.

Caution: You should check other tools apart from the “Bitcoin investor tool” as it is possible that the BTC price doesn’t reach the 2-year MAx5 during a rally, as was the case in 2021.

3️⃣ Pi Cycle Top 

The “Pi Cycle Top” is also an indicator built by Philip Swift, and it works by comparing two moving averages of Bitcoin’s price.

The first is the 111 Simple Moving Average (SMA), and the second comprises the 2 x 350 SMA.

💡 When the 111 SMA > 2 x 350 SMA → that’s an indication of an overheated market.

A signal for you to get out during the following pumps.

💡 When the 111 SMA < 2 x 350 SMA → Bearish trend shift has happened.

Caution: The Pi Cycle Top Indicator is a lagging indicator. Knowing when the party is over and the bear market is starting is useful. Ideally, you shouldn’t have any funds in the market when the bearish cross happens.

4️⃣ Mayer Multiple

A popular investing strategy is called the “Mayer Multiple.” It calculates the distance between a 200-day moving average and the current price.

The 200-day MA is a good indicator to gauge whether the market is bullish or bearish. This means that when the Mayer Multiple is high, either on an upswing or downswing, it can signal strong overbought or oversold conditions.

• Mayer Multiple < 0.8 (green) → All values below 0.8 are good buying levels. Below 0.6 is a fantastic and unique buying opportunity that only happened a handful of times in the past.

• Mayer Multiple > 2.4 (red) → All values above 2.4 are great selling opportunities. When the Mayer Multiple goes above 3.4, you shouldn’t think twice about selling.

📣 Closing Words & Staying Updated 📣

These are some of the most important indicators I have personally used to find a lot better entries into the market.

There are a lot more. I’ll cover many simple-to-use tools/indicators to help you navigate the markets.

You only need patience and emotional resilience for these long-term indicators to flash buy during the bear market.

Then, you need to have the guts to pull the trigger when they do.

If you are still reading this, then congrats! You have a higher attention span than 99% of the other participants in the space.

Trust me, you will succeed.

If you enjoyed this, then share this knowledge with a friend. If you hated it, share it with an enemy.

I’ll also share updates on Twitter when one or a few of these metrics flash sell.