Title | Pantera

Produced by | Plain Blockchain

Cryptocurrency has once again become the focus of attention. As prices soar, investors need to know when to start being cautious. Based on historical data and price trends since 2013, the cryptocurrency market may need some time to continue to expand, enter a bubble zone, and reach unsustainable highs.

The only suspense now is which event will trigger the next bear market (likely to start in 2025).

In this article, we explore the true signals that indicate the market is peaking. These signals are actually quite obvious but are often overlooked or misunderstood. Technical analysis on YouTube and Twitter (X) is not necessarily reliable because most so-called "experts" are just guessing.

However, the current market is on the edge of the final sprint, and the parabolic trend is about to erupt. The opportunity has arrived, but while we expect prices to reach new highs, we must also be prepared to deal with the inevitable price plunge.

In short, our only goal is to identify market frenzy in a timely manner and make money and exit smoothly before the bubble bursts. This journey may be exciting, but to win, you need to know when to call it quits!

In December 2022, eight indicators showed entry signals, and by 2023, the remaining two indicators also appeared, leading to a significant rebound in the market. While most people were in panic, some took the opportunity to buy at the low. When most people were in a panic, some boldly bought when "blood was flowing like a river."

Different from the general sentiment in the market, when some of the following indicators start flashing red, we need to be cautious, although the market cannot be accurately predicted at the moment, it is necessary to be prepared.

Without further ado, here are the ten key indicators to focus on when a new bubble is about to burst. When these indicators start flashing, it's time for you to jump off the "bandwagon."

01. Ten Signals of Market Peaking

1) Extensive Promotion of Cryptocurrencies on TV

TV shows, financial news, and websites suddenly show strong interest in cryptocurrencies, and reports on cryptocurrency prices will quickly increase and become overwhelming. However, apart from speculative hype, there are very few actual applications, perhaps only a few projects are pursuing practical applications and goals.

When mainstream media coverage becomes intensive, it is a dangerous signal. Usually, this means that the market is already overheated and may collapse soon, especially after these reports attract a large number of new investors. Entertainment programs with little financial knowledge will also start discussing cryptocurrencies because it has become a hot topic that can attract viewers' attention.

After cryptocurrencies become mainstream again, it can only last for two to three months at most. We have seen the same situation in 2013, 2017, and 2021. The end of 2024 to the beginning of 2025 will be no exception. We have not yet entered the frenzy stage, so there is no need to worry too much before seeing a significant increase in media attention.

2) Endorsement of Cryptocurrencies by Celebrities and Internet Celebrities

Endorsements by celebrities and social media influencers are often a contrarian indicator financially, especially those endorsements of unreliable financial products.

I published a research article on this topic in early 2021, analyzing the events of 2017 (although there have been more similar situations in the following years):

The impact of celebrities and internet celebrities on cryptocurrency prices is almost the same, and their promotional effects are also similar. In addition to Twitter (X), TikTok, and Instagram, you will also see top Twitch streamers promoting some unreliable cryptocurrencies and platforms. These promotional activities usually occur when the market is peaking, and most top streamers do not even disclose how much they are paid for the promotion, but instead pretend to be very interested in cryptocurrencies.

Whether it's a celebrity, internet celebrity, or streamer, the common point when they suddenly start promoting cryptocurrencies on a large scale is that they have no idea about the true use of cryptocurrencies.

3) Increase in Scams

Based on past experience, when the market is approaching its peak, scams will become rampant.

Scammers will redouble their efforts, and various scam methods will emerge, such as forged exchange websites, large-scale phishing attacks, and fraudulent projects or Ponzi schemes that abscond with funds.

Billions of dollars in cryptocurrencies will be cashed out into fiat currencies, causing a significant outflow of funds from the market, impacting market liquidity.

4) Google Trends "Buy Cryptocurrency" Indicator

In the past, it used to be "buy Bitcoin," but it is no longer the case for various reasons, which we will not discuss here.

The key point is that this chart lags behind by a few weeks. It does not reflect the current interest in cryptocurrencies but lags behind by about a week.

Below is the chart and its interpretation:

When we see parabolic price trends like in 2021, it is good news for those who have already invested, but it means high risk for newcomers. This is the nature of the market, and you need to decide which side you want to be on.

Currently, the chart shows that early investors are starting to profit, while new investors face greater financial risks.

In the frenzy stage, it is time to consider selling, rather than making unwise investment decisions.

In this heightened emotional state, you must act quickly and decisively.

Selling strategies may vary, but a reminder that completely exiting the investment is not the most ideal choice.

5) Retail Panic

Massive retail panic (FOMO) is a reliable indicator of the market peaking. "Fear of missing out" is a common psychological phenomenon that can lead to unwise investment decisions.

Although FOMO can be "shorted," be careful because the market may remain irrational for a period of time.

6) Price Soaring to Unrealistic Levels (Waiting for Parabolic Trends)

You all know that it is best to avoid buying in this situation:

However, at the market peak, trading volume will always reach its peak.

At this time, most potential investors (usually the target group of retail investors) will enter the market to buy.

At the same time, smart money that entered early will quickly and quietly exit the market because the news and publications they control will still look positive.

7) Cryptocurrency Becomes a Symbol of Social Status

Owning cryptocurrency has become a symbol of social status.

You will see people wearing hats, clothes, and accessories with cryptocurrency logos on social media. When cryptocurrencies start to be seen as fashionable, it often means that the market is driven more by social sentiment than fundamentals, which usually indicates that the market is about to peak.

When cryptocurrencies suddenly become a symbol of social status, get ready to "sell."

8) Exchange Failures

During periods of increased market activity, major CEX/DEX often experience failures due to a large number of users accessing the platform simultaneously.

This surge in activity usually occurs before or after the market peaks, when everyone is rushing to buy or sell.

Although this indicator indicates that the market may be overheated, it alone cannot determine the start of a bear market. It still needs to be combined with other indicators for a comprehensive judgment.

9) Position in the Cycle

The halving event is the timer of the market cycle, and the bull market cannot end so quickly. The positive impact of halving usually takes 12 to 18 months to show.

Prices may suddenly surge, and the parabolic trend may start at any time in the remaining four months of 2024.

However, during this period, prices may also plummet at any time, but these plunges usually recover quickly, indicating that the parabolic trend is almost inevitable.

So far, every bull market has had such moments that made investors panic early. Exchanges have made billions of dollars through market fluctuations, so a flash crash is inevitable.

There is no bear market yet, and it is highly unlikely to occur in 2024, although the profitability of each cycle is low when the market cycle approaches its limit. The most likely scenario is that these indicators will start sounding the alarm in the first quarter of 2025.

10) Your Barber Buys Cryptocurrency

I have no opinion on any profession, and being a barber is also an important profession. However, if you overlook all other indicators and fail to see that you are in a bubble, then your barber might be the last and perhaps the only indicator you need.

So, when prices have been rising for a long time, remember to visit your barber regularly, perhaps once a month. However, it must be your barber who brings up the topic, otherwise, the effectiveness of this indicator may be uncertain.

02. Conclusion

This is another prediction I made in 2021:

After the market peaks, Bitcoin will experience a significant decline, followed by a two-year bear market.

The current parabolic trend seems to have ended, and if it continues to rise, it is very likely to peak next time, but I don't think it will happen again.

I believe the market has peaked, and it may not reach its high point again until 2024.

— Pantera (March 3, 2022)

Looking at a single indicator is not enough to make you uneasy. Usually, we need a combination of multiple indicators to trigger an alarm. However, the 10th indicator itself could potentially be an important warning signal.

It is worth noting that none of these indicators currently indicate that the market has peaked. Although there may be a bubble, there is still plenty of room for growth before it bursts. Currently, no indicators are showing red flags, so our current score is 0/10, and the likelihood of the bull market ending here and the parabolic trend not appearing is almost zero.

Once you see most or all of the indicators appear, it may already be too late, so be cautious about the cryptocurrency influencers you follow.

However, there is no need to worry too much at the moment, but make sure to research actual indicators that will help you make informed investment decisions.

Currently, we see all declines being filled, and interest is slowly rising, with no clear signals indicating the need to sell. However, overconfidence may be the 11th indicator that I have overlooked. So, while we may observe various analyses and signals, the situation can change at any time, and all we can do is effectively manage the risk.

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