New metrics just dropped — the BTC Seller Exhaustion Index!
It measures both low volatility and high losses; when both conditions are met, the indicator triggers a signal.
First, the current state: the seller is already in the "extreme exhaustion zone" (the red area), and this is the first time this bearish cycle has entered that zone.
Looking at historical data, you can see that every previous bear market cycle had similar situations; sometimes more than once (labeled 1/2 in the chart).
When the current 1 appears, it may not be the absolute lowest point of the bear market, but it is definitely within the bottom range.
After that, if the price keeps ranging or goes even lower, but the index does not go any lower, I mark that as 2; across history, the confirmation of 2 is more reliable than 1.
However, the risk is that the price for 2 may still be higher than 1.
Based on the observations above, we can draw this conclusion:
If you’ve already entered a position, that’s not wrong; waiting for 2 to appear before building a position is also not wrong. But if 2 appears and you still don’t buy, then you’ll miss the entire bull market.
(ps: Don’t say I keep coming up with new indicators. It’s the Glassnode team that updates them frequently. I saw them and thought they might be useful, so I’m sharing them with everyone.)
It measures both low volatility and high losses; when both conditions are met, the indicator triggers a signal.
First, the current state: the seller is already in the "extreme exhaustion zone" (the red area), and this is the first time this bearish cycle has entered that zone.
Looking at historical data, you can see that every previous bear market cycle had similar situations; sometimes more than once (labeled 1/2 in the chart).
When the current 1 appears, it may not be the absolute lowest point of the bear market, but it is definitely within the bottom range.
After that, if the price keeps ranging or goes even lower, but the index does not go any lower, I mark that as 2; across history, the confirmation of 2 is more reliable than 1.
However, the risk is that the price for 2 may still be higher than 1.
Based on the observations above, we can draw this conclusion:
If you’ve already entered a position, that’s not wrong; waiting for 2 to appear before building a position is also not wrong. But if 2 appears and you still don’t buy, then you’ll miss the entire bull market.
(ps: Don’t say I keep coming up with new indicators. It’s the Glassnode team that updates them frequently. I saw them and thought they might be useful, so I’m sharing them with everyone.)