Master the signals of the peak in this bull run, and withdraw in time to avoid being trapped!

1. Price
Generally speaking, during a bull run, the market rises more than 2 times, and Bitcoin rises 2-3 times.
When Bitcoin has been consolidating for a long time and altcoins have almost all risen, it's time to be especially careful. At this point, the market has already seriously exceeded and overdrawn future value, and one must learn to stop at the right time.
2. On-chain transaction volume
During a bull run, on-chain transaction volumes typically expand significantly, and funds flow frequently. However, it is worth noting that when prices reach new highs and on-chain transaction volumes begin to decline, it is an important signal of a peak.
For example, in the later stages of the 2021 bull run, although on-chain trading volume surged in the short term, it gradually shrank afterwards, indicating that the market's willingness to inject funds began to weaken.
3. Leverage and Lending Data
In the DeFi market, leverage and lending data are important indicators for assessing market sentiment:
Surge in borrowing demand: Investors are borrowing stablecoins to purchase mainstream assets in large quantities, indicating a heightened market sentiment.
High liquidation risk: If the liquidation price of most borrowed funds approaches the market price, it indicates that investors are overly optimistic, and leverage risk increases.
Typically, overly high leverage can trigger a chain liquidation with slight market fluctuations, becoming the starting point of a bull run crash.
4. New Wallets Added
In the later stage of a bull run, the number of new wallets will significantly increase, and many newcomers will enter the market. It is especially important to be cautious when retail investors are opening a large number of wallet addresses.
For example, at the peak of the bull run in 2021, the number of active MetaMask users once exceeded 10 million, but the market quickly turned bearish afterwards.
5. Regulatory Policies
The cryptocurrency market is a policy-sensitive market, and regulatory dynamics often determine the market direction.
In 2017, China banned ICOs, and in 2021, it cleaned up mining farms. These policies directly triggered the end of the bull run. Pay attention to global policy dynamics, such as the movements of the SEC in the United States and China's anti-money laundering policies.
6. Institutional Fund Trends
The inflow and outflow of institutional funds is an important indicator of a bull run, such as the BTC holdings of Grayscale and the net inflow and outflow of ETF funds. If institutional funds begin to reduce their holdings of mainstream assets or shift to other areas, it indicates that the market has entered the late stage of the bull run.
At the end of the market, the speed of capital inflow will slow down, and may even turn into outflow, which means net selling, indicating that the market is about to come to an end. This is an important reference indicator.
7. Market Capitalization and Valuation
In a bull run, the market value and valuation of many cryptocurrencies may deviate from their fundamentals.
For example, in 2021, DOGE's market value once ranked among the top five, and certain NFT projects were valued at hundreds of millions of dollars. If a similar bubble phenomenon appears again, it indicates that the market is already overheated and may correct at any time.
8. Comparison of Market Capitalization with Global Economy
The cryptocurrency market can also be measured for bubbles using the "Buffett Indicator". When the total market capitalization of the crypto market exceeds a certain threshold (such as 15%) of the global GDP, it indicates that the market valuation is too high.
For example, in 2021, the total market value once exceeded 30 trillion USD, while the global GDP was about 85 trillion USD, corresponding to approximately 3.5% share. This rapid expansion is a risk signal.
9. Media Public Opinion
When mainstream media begins to vigorously promote "no top to the bull run" and "Bitcoin will reach $1 million," it is time to be cautious. The media hype is often a reflection of overheated market sentiment and is an important signal of hitting a peak.
10. Significant pullback or fluctuation
During a bull run, the coin price continues to rise, but if there is a sudden drop in a single day or a prolonged sideways consolidation, it may be a sign of capital fleeing.
For example, at the end of the bull run in 2017 and 2021, Bitcoin experienced several significant adjustments, followed by a bear market.
11. Discussions among people around you
When your friends, colleagues, and even family members who have never been involved with cryptocurrencies are discussing buying Bitcoin or altcoins, be careful. The concentration of retail investors entering the market is often a sign of the end of a bull run.
In 2017 and 2021, this phenomenon was very obvious, and the ones who ultimately bought in were these "latecomer" novice investors.