The analysis focuses on three widely referenced signals that have historically aligned with cycle peaks and overheated conditions in the ETH market.
1. Price Top (Standard Deviation Model)
Formula: Realized Price + 2× Historical Standard Deviation of the Close Price
Use Case: This model incorporates price volatility to define dynamic resistance levels. When Ethereum approaches this line, it may suggest excessive market exuberance and a potential short-term top.
2. 2× Realized Price
A straightforward but powerful metric, this level has repeatedly acted as a resistance point during bull markets. It represents a market doubling from the average cost basis and typically reflects increasing risk of profit-taking.
3. 3× Realized Price
Often marking the final phase of a bull cycle, this line has historically coincided with major market tops. Reaching this level is seen as a sign of extreme sentiment and speculative froth.
Interpreting These Levels
These indicators are not exact sell signals, but they highlight zones of heightened risk, where the probability of sharp pullbacks increases. The price_top_stddev model adds a volatility-based nuance, while the 2× and 3× realized price lines offer psychological and historical context based on capital inflows.
These tools provide on-chain analysts with a framework for assessing Ethereum’s upside potential relative to historical performance, particularly during parabolic phases of a bull market .
