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Bitcoin Capitulation Index

Last Signal Date (>2): 20-Jun- 2022

Last Signal Value: 2.77


Last Update – 09-Sept-2022

Update Frequency: Weekly (Monday)

NOTE – the model is calculated manually on weekly basis at this stage. Our intention is to update the graph every Monday, once the data from the past week is available. There are however no guarantees or promises that the graph will be updated timely.

What is the Bitcoin Capitulation Index?

Bitcoin Capitulation Index aims to spot the Capitulation Phase of a market cycle. The screenshot below explains the market cycles pretty neatly:

Source: thetechnicaltrader.com

How to read it?

A value above 2 is considered a signal.

 

As per the theory of the market cycle, after a capitulation signal, we can expect a flat price action (ranging) for significant periods of time. After the range, the expectation is to see continuation higher.

 

Keep in mind, that there were situations in the past (based on the back test), where the signal was too early (price dropped lower significantly before another signal occurred) and also situations where the price shot up, immediately after the signal.

 

Example:

Weekly data for the week of May 9 – May 15 had a reading of 2.56. Since it is above 2, it is considered a signal. The signal is recorded on May 16 (Monday) once the previous week is finished.

Can the price go lower after a signal?

Yes. 

Do your own research before you invest. 

Statistics

Our data tracks back to April 2015. Using all the available data, we get 11 signals in total. Columns D through H measure the returns (from the weekly candle close) for 7, 30, 90, 180 and 365 days since the day of the signal. 

The simple conclusion here is that the signal manages to capture the overall market cycle. We observe how the returns are gradually increasing as time periods are increasing. 

The “% Negative” row at the bottom counts the negative values from the total signals.