Charts of the Week: Bitcoin Enters the Goldilocks Zone
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Where is bitcoin now in the cycle? A useful exercise is to compare the spot price over time to three broad categories of models: ceiling models (typically based on long-term moving averages), which identify bull peaks when the market is extended above the historical trend; cost-basis models, which use onchain data to estimate whether current holders are in profit (and hence their motivation to sell, depending on how long they’ve held); and floor models, which detect when selling pressure exhausts.
Looking back over more than a decade and a half, every major market top (2013, 2017-18, 2021) saw the price touch or break the dashed ceiling models. Every major crash found support near the dotted floors.
This week BTC ripped through the 200-week moving average floor and through the shorter-period Pi Cycle (111-day simple moving average) and short-term holder realized price cost bases. As of Thursday morning, bitcoin is now trading above all the floors and cost bases but well below the ceiling indicators. The implication is that capitulation is over. Holders are in profit across cohorts (no forced selling from underwater positions), and the price has room to run. Not necessarily the bottom, but possibly close.
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