This doesn’t mean that the tools are 100% going to help catch the top.
In the latest issue of Glassnode’s weekly newsletter, five tools are were put forward as candidates for predicting the market top.
The Mayer Multiple uses statistical methods to show that a 2.4 Mayer Multiple value will reflect an unlikely extreme.
The tool was originally created by analyst Willy Woo as an epically fitted model that multiplies the all-time average price by a factor of 35.
Woo’s model has proven to be a much less volatile tool to predict the market top than the Mayer Multiple.
The report explains this third tool further by saying that high values in the market mean that investors continue to hold large unrealized profits, indicating that the sell incentive has hit a maximum.
“Conversely, bottoms can be found when the market is heavily underwater and investor capitulation is most likely underway.
Since market bottoms occur when older, smarter investors buy and hold a maximum volume of the supply, the inverse is correct for predicting the top.
The RHODL ratio suggests that the market will peak when the number of newer coins in the market is high relative to older coins.
As more holders refuse to sell, there will be fewer destroyed “coin-days”, causing the Reserve Risk metric to trend lower.
However, the prices will eventually get to a point where most holders are willing to sell.
It should be noted that despite the bull market and large volumes of bitcoin accumulated in the past six months, Reserve Risk continues to trend low.