Pi Cycle Top Indicator: Complete Analysis – Uncovering the Mathematical Laws of Bitcoin Cycle Tops

Pi Cycle Top indicator uses two specific moving averages: the 111-day moving average (111DMA) and twice the 350-day moving average (350DMA×2). When the shorter-term (111DMA) crosses above the longer-term double line (350DMA×2), this crossover is considered a potential market top signal. The name of this indicator stems from an interesting mathematical coincidence: 350 divided by 111 is approximately 3.153, which is very close to pi (about 3.142).

Origin and Mathematical Principle of the Indicator

The Pi Cycle Top indicator was created by Philip Swift in April 2019, who is the Managing Director of Bitcoin Magazine Pro. This tool quickly gained legendary status within the Bitcoin community due to its remarkable accuracy in identifying market cycle tops.

The core of the indicator is relatively simple: two moving averages. The 111-day moving average (111DMA) represents short-term price trends and reacts quickly to price changes. The 350-day moving average (350DMA) reflects long-term trends, providing a smoother view of market movements. The magic of this indicator lies in the special relationship between these two lines. When 111DMA crosses above 350DMA×2, historical data shows this often coincides with Bitcoin market cycle highs. This crossover is viewed as a potential sign of market overheating.

Historical Performance and Validation

Historically, the Pi Cycle Top indicator has performed exceptionally well. It successfully identified the peaks of the past three Bitcoin cycles, with timing accuracy usually within three days. This record makes it one of the most watched timing tools in crypto analysis. Specifically, during the 2013 cycle, the indicator accurately signaled the top before a significant price decline. The 2017 cycle also demonstrated its predictive power, providing clear warning signals before major corrections.

The double top structure in 2021 further validated this indicator. The signal from the indicator aligned with the first top, followed by a substantial market correction. This consistent historical performance has increased traders’ confidence in this tool. It’s important to note that the effectiveness of the indicator may change as Bitcoin’s market matures. With the introduction of Bitcoin ETFs and increased institutional adoption, market structure is undergoing fundamental changes. These structural shifts could impact the predictive power of traditional cycle indicators.

Current Market Analysis

The current market situation shows interesting differences from historical patterns. According to recent analysis, several classic top indicators, including the Pi Cycle Top indicator, have not yet issued extreme overheating signals in this cycle.

As of February 2026, the dual lines of the Pi Cycle Top indicator have not crossed. This aligns with Bitcoin’s current price performance. According to Gate data, Bitcoin (BTC) is currently priced at $76,473.9, with a market cap of $1.56 trillion and a market share of 56.80%. The price change in the past 24 hours is -2.99%. Meanwhile, Ethereum (ETH) is priced at $2,277.55, with a market cap of $353.69 billion and a market share of 11.30%, with a 24-hour change of -2.97%. The overall market is in a correction phase but has not yet shown typical cycle top characteristics.

Other related indicators also support this observation. The Puell Multiple is currently in a moderate range of 1-2, not reaching historical top levels. The Bitcoin Rainbow Chart shows prices in the yellow to orange zone, not yet entering the red bubble area. The consistency among these indicators suggests the market may still be in the middle of the cycle rather than at the end.

Table: Current Cycle Major Top Indicators Status Comparison

Calculation and Usage Guide

The Pi Cycle Top indicator is based on two moving averages. First, calculate the 111-day moving average of Bitcoin’s closing prices, which is the sum of the closing prices over the past 111 days divided by 111. Similarly, calculate the 350-day moving average using the past 350 days’ closing prices.

In practice, many trading platforms and data analysis websites have integrated this indicator, so investors do not need to calculate it manually. The key is to watch when the 111DMA crosses above twice the 350DMA. When this crossover occurs, it is traditionally viewed as a potential market top signal, indicating that the price increase may be overextended and possibly detached from fundamentals. However, it’s important to emphasize that no single indicator should be used as the sole basis for trading decisions.

A prudent approach is to incorporate this indicator into a broader analysis framework. Combining it with other technical indicators like RSI or MACD can provide a more comprehensive market view. Also, considering on-chain data, market sentiment, and macroeconomic factors is crucial.

Limitations of the Indicator

While the Pi Cycle Top indicator has an impressive historical record, it is not perfect. Like all technical analysis tools, it can generate false signals under volatile market conditions. Traders relying solely on this indicator may make decisions based on inaccurate predictions. Its effectiveness may also face challenges due to changes in market structure. As Bitcoin becomes more integrated into the global financial system, influenced by institutional funds and ETF products, its price patterns may evolve. Traditional cycle indicators based on retail-driven markets might experience diminishing returns.

In this cycle, some phenomena differ from traditional patterns. For example, the Short-Term Holder Supply (STH) has risen to about 5.5 million BTC, but the price peak occurred on October 6, 2025, diverging from the STH peak timing. This may reflect a shift in market participant structure. Investors should avoid over-reliance on a single indicator for decision-making. A balanced approach includes combining fundamental analysis, multiple technical indicators, and risk management strategies. The market is always full of uncertainties, and flexibility and adaptability are key to long-term success.

From current data, several top indicators have not yet reached extreme levels historically. According to the latest Gate market data, Bitcoin’s market cap remains at $1.56T, despite minor adjustments in the past 24 hours. Analysts observe that the stable inflow of institutional funds in this cycle may be changing Bitcoin’s price dynamics, challenging the effectiveness of traditional cycle indicators. The Pi Cycle Top indicator’s dual lines have not crossed, and others like the MVRV Z-Score remain in the neutral 2-4 zone, suggesting the market may not have topped yet.

As the cryptocurrency market continues to evolve, relying solely on historical patterns for prediction increases risks. Investors need to combine classic indicators with a deep understanding of market structure changes to better navigate this increasingly complex financial landscape.