How to Analyze Bitcoin (For Dummies)
You don't need to be an analyst or trader to understand the fundamentals of Bitcoin. Just use this simple guide to begin analyzing Bitcoin for yourself - no specialist knowledge required.
Introduction
Tools like trading indicators, candlestick patterns, or Fibonacci spirals are tools designed for short-term traders of Bitcoin, like day or swing traders.
But if you are buying and holding for the long-term, there are more useful tools out there that can help you understand Bitcoin, and where it fits into the bigger economic picture.
They show you where Bitcoin is in the current cycle, how it compares to other assets, and whether the wider market environment is currently favorable for Bitcoin price growth.
This post is your guide. It includes:
8 essential charts covered in my YouTube video
11 bonus resources that give you even more context and detail
A link and explanation for each one
At the bottom of this post, you’ll also find a downloadable PDF version of this toolkit so you can keep it handy.
Do not feel obliged to try to use and understand them all at once - it can be overwhelming. Keep them on hand and just pick one or two that interest you and take a look at them when you have the time.
Please note that this list is not exhaustive, by any means. There are many great free resources for analysis of Bitcoin. If you think I’ve forgotten anything really important, let me know in the comments!
📈 Section 1: Bitcoin-Specific Resources
1. Long-term Bitcoin Price Chart (Linear/Log)
Link: CoinGecko Bitcoin chart
What it is: Bitcoin’s price history since 2013. It defaults to linear view, but you can change it to logarithmic (log) scale. A linear chart shows raw price moves, so the jump from $10k → $20k looks enormous while $1 → $10 is almost imperceptible. Log scale shows moves in percentages (relative), so both of those examples appear as a 100% increase.
How to use it: Choose linear or log view, and zoom out. This smooths the “noise” of daily volatility and shows the repeating pattern: steep rises, corrections, and long-term growth. It’s the clearest way to see Bitcoin’s overall upward trend.
2. Bitcoin Halving Countdown (BONUS)
Link: Halving Countdown
What it is: A live countdown to Bitcoin’s next halving — when the number of new coins mined per block is cut in half (roughly every four years). This programmed scarcity is central to Bitcoin’s design.
How to use it: Each halving has historically preceded a major bull run. You don’t need to time it to the exact day, but keeping an eye on the cycle helps you understand why supply shocks affect price. If you scroll down, you can see a chart of Bitcoin’s price movements over the previous three cycles vs. the halvings.
3. Bitcoin Exchange Balances
What it is: Tracks how much Bitcoin is held on exchanges. Coins on exchanges are liquid and easy to sell; coins in private wallets are harder to move quickly.
How to use it: Scroll down to view the Bitcoin Exchange Balance as a chart. A declining trend suggests holders are moving Bitcoin to self-custody, reducing available supply and signaling long-term conviction. A rising trend may indicate more selling pressure ahead. Currently we can see that the exchange supplies have dropped around -25% since Jan 2024.
4. Pi Cycle Top Indicator (BONUS)
Link: Glassnode Pi Cycle Top
What it is: A model that overlays two moving averages (or multiples of) the Bitcoin price. Crossovers have historically signaled Bitcoin’s cycle tops with surprising accuracy (2013, 2017, 2021).
How to use it: Where the lower green line comes up and crosses the purple line, this has been a very accurate indication of previous market peaks. If it’s difficult to see, you can click and drag on a section to zoom in. You can see that in the current cycle, there is still a significant gap between the two lines, potentially indicating that a peak has not yet occurred this cycle.
5. 2-Year Moving Average (MA) Multiplier (BONUS)
What it is: A long-term valuation model. It plots Bitcoin’s 2-year moving average and multiples of that line, showing under- and over-valuation zones.
How to use it: When price is below the 2-year average (green line), Bitcoin has historically been undervalued (strong buying opportunities). When it crosses above the red band, the market has often been overvalued or overheated. Right now, Bitcoin price is sitting around the middle of the two lines - neither under or over-valued right now. You can also zoom on this chart to see more detail.
🌎 Section 2: Macro economic resources for the bigger picture
1. Global Asset Returns (Sharpe Ratios)
What it is: A comparison of major asset classes (stocks, bonds, gold, USD, Bitcoin) adjusted for risk using the Sharpe ratio. A higher Sharpe ratio = better returns for the level of risk taken.
How to use it: Bitcoin sits at the top, delivering the best risk-adjusted returns over 5 and 10 years. The USD, by contrast, has a low-to-negative Sharpe ratio — meaning risk with little to no reward.
2. Bitcoin vs Crypto Market Dominance (BONUS)
What it is: A snapshot of Bitcoin’s share of the total crypto market.
How to use it: Shows why Bitcoin is not “just another crypto.” It absolutely dominates the market in size and stability, compared to thousands of altcoins. The next largest crypto asset - Ethereum - is less than 20% of BTC’s market cap.
3. Global M2 Money Supply
Link: BGeometrics Global M2
What it is: Tracks the total money supply (M2) of 21 major economies. M2 expands consistently, with sharp jumps in crises like 2008 and 2020.
How to use it: The blue line on the chart is the one that is of greatest interest to us. It shows the consistent expansion of the global money supply over the last decade. I suggest toggling the green line (YOY change) off by going to the legend at the top of the chart and clicking on it. Expanding money supply devalues fiat currencies over time. Bitcoin, with its fixed cap of 21 million coins, benefits as a hedge.
4. Bitcoin & Global M2 Offset (BONUS)
What it is: The same M2 chart as above, but with the blue line shifted forward 10 weeks to show how Bitcoin tends to follow money supply changes with a time lag.
How to use it: Because liquidity (money supply) takes some time to work it’s way into Bitcoin (around 2-3 months), shifting the global M2 forward helps to highlight the correlation between liquidity expansion and Bitcoin price moves - especially if you change the time period to the last 2 years. Bitcoin price generally follows global liquidity, so pullbacks and surges can often be seen in global liquidity before they occur in Bitcoin’s price.
5. US M2 Money Supply (BONUS)
Link: FRED US M2
What it is: US-specific money supply data. The US dollar is the world’s reserve currency, so its supply growth affects everyone.
How to use it: Look for the sharp surge since 2020, which explains rising prices across assets and daily life. You can see that it was the steepest increase of all time on the chart. Many people do not realize just how significantly the USD money supply has expanded just in the past 5 years alone.
6. Loss of USD Purchasing Power (BONUS)
What it is: A century-long chart of how much the dollar has lost in value. $100 in 1913 is worth only a few dollars today.
How to use it: A reminder that fiat money always trends down in real terms, while Bitcoin is designed for scarcity.
7. Currency vs Bitcoin Comparison (BONUS)
Link: XE Currency Charts
What it is: A tool to compare any fiat currency (USD, EUR, GBP, etc.) against Bitcoin.
How to use it: See how quickly your own currency is losing value when measured in Bitcoin. Select your currency on the left-hand drop down box, and then select BTC in the right-hand drop-down box. You will see a chart of your currency plotted in BTC in the resulting chart. You can change the time period by clicking the options along the top of the chart.
8. Cost of Living in USD vs BTC (BONUS)
Link: InflationChart.com
What it is: Compares the cost of living in dollars vs Bitcoin over the last decade.
How to use it: In USD, costs rise steadily with inflation. In Bitcoin, costs fall as Bitcoin absorbs more spending power and becomes more scarce. It’s a simple but powerful way to see why people call Bitcoin ‘hard money.’
9. US Debt Clock
Link: US Debt Clock
What it is: A live dashboard showing US national debt, deficits, and unfunded liabilities in real time.
How to use it: The constantly rising figures show how dependent the fiat economy is on debt and money creation — the very system Bitcoin was built to counter. If you take a look at the ‘Money Creation’ section on the left hand-side, you can see the money supply ticking up in real time.
9. World Debt Clocks (BONUS)
Link: US Debt Clock - World Debt Clocks (limited) OR World Debt Clocks (all countries)
What it is: Total debt and debt-to-GDP ratios for all major countries.
How to use it: Compare your own country’s debt sustainability. A debt-to-GDP ratio above 100% is considered a strong warning sign.
10. Top Assets by Market Cap
What it is: A leaderboard of global assets (gold, silver, companies, Bitcoin) ranked by market capitalization (size).
How to use it: Check back to see where Bitcoin ranks as it grows as an asset. The table shows Bitcoin already surpassing silver and rivaling major tech companies in market cap - but still small compared to gold, demonstrating its growth potential in the future.
11. Size of BTC vs Other Global Asset Classes (BONUS)
Link: BTC vs Asset Classes
What it is: Compares Bitcoin’s market cap to global asset categories like total equities, bonds, and real estate.
How to use it: This chart illustrates just how small Bitcoin is currently compared with other asset classes. Meaning that even a relatively small reallocations from another asset class will have an outsized effect on Bitcoin’s price in the future.
☺️ Section 3: Sentiment & At-a-Glance Checks
1. Google Trends (Bitcoin)
Link: Google Trends
What it is: Tracks search interest for “Bitcoin.” Peaks often line up with bull market tops.
How to use it: If search interest is low but price is near all-time highs, it may suggest institutions are leading the rally. High search spikes often mean retail frenzy. If you zoom right out, you can see that Bitcoin’s search interest peaked in December of 2017, and again in Feb-May 2021. Currently, it is relatively low, but rising.
2. Fear & Greed Index
Link: Fear & Greed
What it is: A daily sentiment gauge (red = extreme fear, green = extreme greed). It combines volatility, momentum, social media, surveys, and other indicators.
How to use it: Use it as a ‘gut check.’ Extreme fear has historically been good for buying; extreme greed often signals a lot of FOMO in the market and tends to co-incide with price peaks. If you want to zoom in to a particular area on the chart, you can click and drag the cursor.
This toolkit brings together the essential charts and indicators that help you understand Bitcoin in its proper context - not just as a digital asset, but as part of the wider economic system. By looking at long-term price trends, exchange supply, risk-adjusted returns, money supply growth, debt levels, and market sentiment, you can cut through short-term noise and see the signals that really matter.
Whether you’re new to Bitcoin or building confidence as an investor, I hope these resources give you a simple framework to analyse Bitcoin for yourself and to recognize some of the forces shaping its future.
If you are looking to buy Bitcoin, I use and recommend Caleb & Brown. They offer personalized service and if you need a bit of guidance or hand-holding through the process, you can deal directly with your personal broker. They charge a flat fee and there are no hidden costs or spreads. I would never go back to buying through a centralized exchange after buying with them! Their platform even has a super simple to use dollar-cost-average feature - just set and forget. I love it.
As a client of The Bitcoin Way I can confidently recommend their services to anyone serious about securing their Bitcoin. Their team guides you step by step through setting up and maintaining the highest standard of self-custody, giving you peace of mind that your Bitcoin is safe.
I am a referral partner of Caleb & Brown and The Bitcoin Way, so I receive a small commission if you become their client. Caleb & Brown unfortunately cannot accept UK or New York-based clients.
⛔️ FINANCIAL DISCLAIMER: This content is for informational and entertainment purposes only and should not be considered financial, investment, or legal advice. I am not a licensed financial advisor, accountant, or investment professional. The information shared in this post reflects my personal opinions and is based on publicly available data at the time of recording. All investment decisions—especially those involving Bitcoin or other digital assets—carry risk and should be made only after conducting your own due diligence and consulting with a qualified financial advisor. Never invest more than you can afford to lose.
📥 Download the Kit
This entire toolkit - all 19 linked resources - is also available as a PDF you can download and keep.
Very nice publication