CCT Pi Cycle Top/Bottom

Pi Cycle Indicator: Market Cycle Top & Bottom Detection

Overview
The Pi Cycle Indicator is a widely recognized tool used to identify market cycle tops and bottoms based on specific moving averages. This indicator is particularly useful for long-term trend analysis, especially in the Bitcoin market. The F!72 Pi Cycle Indicator combines the traditional Pi Cycle Top and Pi Cycle Bottom indicators into a single script, improving readability and visualization.

Why These Moving Averages?
The selection of moving averages in this indicator is based on historical backtesting and their observed efficiency in marking major market cycle turning points.

- Pi Cycle Top:
- 111-day SMA: A short-term simple moving average that reacts relatively quickly to price changes.
- 350-day SMA (x2): A long-term simple moving average, multiplied by 2 to create a dynamic resistance level. Historically, when the 111-day SMA crosses above the 350-day SMA (x2), it has marked market tops with high accuracy.
https://www.tradingview.com/x/NaD7yKiz/[\image]


- Pi Cycle Bottom:
- 150-day EMA: An exponential moving average that gives more weight to recent price action, allowing it to capture price reversals earlier.
- 471-day SMA: A long-term simple moving average that provides structural support. When the 150-day EMA crosses below the 471-day SMA, it has historically indicated market cycle bottoms.
https://www.tradingview.com/x/DYlKdnUD/[\image]


Timeframe Considerations
The Pi Cycle Indicator is most effective on the daily timeframe[\b]. Due to the long lookback periods of the moving averages used, lower timeframes (such as 4H or 1H) may not provide meaningful signals. The indicator works best when applied to long-term historical price movements.

How to Use This Indicator
1. Enable the Pi Cycle Top and/or Bottom in the settings.
2. Observe crossovers between the short and long moving averages.
3. Pay attention to the cross-labels marking potential market tops and bottoms.
4. Use additional confluence factors such as volume analysis and macroeconomic conditions to validate the signals.
https://www.tradingview.com/x/JMAJJ1UJ/[\image]


Conclusion
The Pi Cycle Indicator has demonstrated strong historical accuracy in identifying market cycle turning points. However, it should not be used in isolation. Traders are encouraged to incorporate additional technical and fundamental analysis to confirm signals before making trading decisions.
This enhanced version improves upon previous implementations by integrating the latest Pine Script v6 capabilities, optimizing both visual representation[\b] and informational accessibility[\b].