Glossary of market-cycle terms
Quick definitions of the terms used across CycleBottom’s risk metrics and cycle-bottom detector. For educational purposes only — not financial advice.
- Risk level (0–1)
- A normalized score of how cheap or expensive an asset is versus its long-term trend. 0 is historically cheap (accumulation); 1 is historically expensive (distribution).
- 365-day moving average
- The average daily closing price over the last 365 days. It smooths out short-term noise to show the long-term trend the risk metric measures deviation from.
- Drawdown
- The percentage decline from a prior peak (often the cycle’s all-time high). Deep drawdowns are one signal of a possible cycle bottom.
- Accumulation zone
- A price range, usually at low risk readings, where long-term buyers have historically accumulated.
- Distribution zone
- A price range, usually at high risk readings, where long-term holders have historically sold into strength.
- MVRV
- Market Value to Realized Value — compares an asset’s market cap to the aggregate price at which coins last moved. Low MVRV means holders are broadly underwater, common near bottoms.
- Hash ribbon
- A Bitcoin indicator comparing short- and long-term moving averages of network hash rate. A recovery after miner capitulation has historically marked good accumulation periods.
- Pi Cycle
- A timing indicator built from long and short moving averages whose crossings have lined up with major cycle tops and bottoms.
- Puell Multiple
- Daily miner revenue divided by its 365-day average. Low values indicate depressed miner economics, often seen near Bitcoin bottoms.
- RSI (Relative Strength Index)
- A momentum oscillator from 0 to 100. Readings below 30 are considered oversold; weekly RSI below 30 is one bottom indicator.
- RSI divergence
- When price makes a lower low but RSI makes a higher low (bullish divergence), suggesting downside momentum is fading.
- Cycle peak
- The highest daily close of a market cycle — the point a bear market is measured from. On CycleBottom the peaks of completed Bitcoin cycles are curated rather than detected, because no single drawdown threshold separates a mid-cycle crash from a cycle-ending top: Bitcoin fell 70% in a week in April 2013 and then rallied more than 17x to its real top that December.
- Bear market duration
- How long a decline lasts, measured in days from the cycle peak to the cycle bottom. Bitcoin's three completed cycles bottomed 364, 406 and 378 days after their peaks — roughly 12 to 13 months. Duration is independent of depth: a bear market can be shallow and long, or deep and short.
- Days since peak
- Elapsed time since a cycle top, used to compare where a decline sits in time rather than in price. Two cycles at the same drawdown can be at very different points in their decline, which is what the bear clock makes visible.
- Capitulation
- A phase of panic selling, often on high volume, where holders give up. It frequently coincides with cycle lows.
- 200-week moving average
- A very long-term average that has historically acted as a floor near Bitcoin cycle bottoms.
- Dollar-cost averaging (DCA)
- Investing a fixed amount on a fixed schedule regardless of price, to spread purchases over time and reduce timing risk.