Cryptocurrency has once again become the focus of attention, with prices soaring. As the market heats up, investors need to know when to start getting cautious. Based on historical data and price trends since 2013, the crypto market may still have some time to expand further before entering a bubble and reaching unsustainable heights. The big question now is: what event will trigger the next bear market? (It’s highly likely to begin in 2025.)
In this article, we’ll explore the key indicators that signal the market is reaching its peak. These signals are actually quite obvious, yet often overlooked or misunderstood. YouTube and Twitter (X) technical analysis isn’t always reliable, as many so-called “experts” are simply guessing.
At this point, the market is on the edge of its final sprint, and a parabolic rally could be imminent. The opportunity is here, but while we wait for new all-time highs, we must also be prepared for inevitable price crashes.
Our main goal is to identify market euphoria before the bubble bursts, cash out, and exit the market safely. The journey might be thrilling, but to win, you must know when to exit before things go south.
In December 2022, eight indicators signaled an entry point, and by 2023, the remaining two indicators appeared, leading to a significant market rebound. While most were in a panic, some seized the opportunity to buy during the market trough. When everyone was in a state of mass panic, a few bold investors were buying into the bloodbath.
Unlike the general market sentiment, when the following indicators start lighting up, it’s time to be on alert. While it’s impossible to predict the market with certainty, it’s always wise to be prepared.
Without further ado, here are the key indicators to watch out for when the new crypto bubble is about to burst. When these indicators begin to flash, it’s time to jump off the “hype train.”
Cryptocurrency Becomes a Hot Topic on TV
When cryptocurrency is suddenly pushed into the limelight on TV shows, financial news outlets, and websites, you know the market is overheated. Coverage on crypto prices will skyrocket, but aside from speculative trading, there’s little real-world application. Only a few projects are genuinely pursuing practical use cases.
When mainstream media starts to focus heavily on crypto, it’s usually a dangerous sign. This indicates the market is likely to be overheated and could soon collapse, especially after attracting a wave of new investors with little financial knowledge. Entertainment programs will discuss cryptocurrency because it’s a trending topic that grabs attention.
Once the crypto bubble hits the mainstream, it typically lasts no more than two or three months. We’ve seen this in 2013, 2017, and 2021, and the same could happen at the end of 2024 or early 2025. We are not yet in the euphoria phase, so there’s no need to worry about this just yet.
Celebrities and Influencers Endorse Cryptocurrencies
Celebrity and influencer endorsements often serve as a contrarian signal in the financial world, especially when it comes to unreliable financial backing.
Increase in Scams
Based on experience, scams become rampant as the market nears its peak. Fraudsters increase their efforts by employing a range of deceptive tactics, such as fake exchange websites, massive phishing attacks, and Ponzi schemes.
Billions of dollars in crypto will be converted into fiat currency, causing a liquidity shock in the market.
Google Trends: “Buying Cryptocurrency” Indicator
Previously, the key search phrase was “buying Bitcoin,” but that’s no longer the case for a variety of reasons, which we won’t get into here.
The important point is that this chart usually lags by about a week. It doesn’t reflect real-time interest in cryptocurrencies but rather shows a delay of roughly one week.
Looking at the chart, the current bull market may be past its peak. For early investors, this is good news, but for newcomers, it represents higher financial risk. During these euphoric phases, it’s time to think about selling rather than making poor investment decisions.
Retail Investor Panic
Mass retail panic, or FOMO (Fear of Missing Out), is a reliable indicator that the market is nearing its peak. FOMO often leads to irrational decision-making. Although FOMO can be “shorted,” caution is required, as markets can stay irrational for a while.
Prices Soar to Unrealistic Levels (Look for Parabolic Moves)
You’re all aware that you should avoid buying when this happens: In a market’s final parabolic phase, trading volume spikes, and most potential investors—usually retail traders—rush in to buy. Meanwhile, early investors quietly exit the market. Despite the seemingly positive news, many smart capital players are exiting while the general public is rushing to get in.
Cryptocurrency Becomes a Status Symbol
When owning cryptocurrency becomes a symbol of social status, it’s time to get ready to sell.
You’ll see people wearing crypto-branded hats, shirts, and accessories, using them as fashion statements. When cryptocurrencies become a social status symbol, it’s a sign that the market is more driven by sentiment than by fundamentals, which usually indicates that the market is about to peak.
Exchange Failures
During periods of heightened activity, major exchanges (both centralized and decentralized) often crash due to a massive influx of users. These surges typically happen just before or around market tops when everyone is rushing to buy or sell. While this indicator suggests the market may be overheated, it can’t solely determine the start of a bear market. It needs to be considered along with other signals.
Cycle
The halving event serves as the market’s cycle timer, and a bull market doesn’t end quickly. The positive effects of a halving typically take 12 to 18 months to manifest. However, price drops can occur during this period, but they usually recover quickly, indicating that a parabolic rally is almost inevitable.
So far, every bull market has experienced such moments where early investors feel panic. Exchanges make billions from market volatility, so flash crashes are inevitable. We are not yet in a bear market, and 2024 is unlikely to be the year. While the market cycle is nearing its limit, profitability tends to decline in each cycle. The likely scenario is that these indicators will start to trigger by the first quarter of 2025.