When will this bull market peak? 7 indicators to help you determine when to exit

This article is from the Plain Language Blockchain, author: Master Wuhuo Qiu.

Last year in the second half, people often asked: Is it a bull market now? To this day, this question has long been forgotten; even the slowest of people know we are in a crazy bull market.

Now more people are asking: When to exit? In other words, are we at the beginning, middle, or already at the end of the bull market? This question basically has no correct answer because almost no one knows. Anyone who confidently tells you a conclusion is either lacking in understanding or a fraud.

This article will not tell you a conclusion either, because stating a conclusion will likely lead to being proven wrong in the future. The aim of this article is to provide some reference indicators that may help you when you decide to exit in the future.

1. BTC Previous High

Do you remember when Bitcoin corrected from over 20,000, and a group of people hurriedly jumped off? A senior figure found it quite amusing and casually tweeted: "These people are like those who waited a long time for a feast, but after having just one appetizer, they hurriedly left, while the main course hasn't even started."

This is actually a much more reliable reference than K-lines or any other indicators. According to the four-year cycle theory of Bitcoin, breaking through the previous high should be a sign that the bull market is just beginning, not ending.

With the previous high of 20,000 dollars, exiting below 30,000 dollars, or starting to short in the long term at this point, reflects a serious misunderstanding of the cryptocurrency market and even the financial market cycle theory.

So, has Bitcoin at 60,000 dollars already peaked? It's hard to say, but according to past cycle theories, a price and market cap three times the previous high seems a bit low, whether based on linear or exponential decay from the previous two cycles. This is why most institutions or big players conservatively see BTC reaching 80,000-100,000 dollars in this bull market, and aggressively see it reaching 150,000-200,000 dollars or even higher.

From this perspective, we seem to be in the middle of the bull market. If we take ETH as an indicator, looking at the previous high of 1,500 dollars, the current 2,000 dollars for ETH feels more like a beginning, and may not even count as being in the middle of the bull market.

2. BTC Dominance

Historically, every peak of a crazy bull market has ended with Bitcoin's dominance reaching a low point.

This is easy to understand; in a bull market, everything rises, and even many fundamentally weak projects can skyrocket, leading to an increase in altcoin market cap and growth rate, while BTC's market cap and price growth will slow down significantly, resulting in BTC's dominance in the overall cryptocurrency market reaching a low point.

At the peak of the bull market on January 13, 2018, BTC's dominance was 32.45%. Currently, BTC's dominance is 53.3%. From this indicator, we also seem to still be in a relatively safe stage of the bull market.

However, it is important to remember that in the last bull market, on December 7, 2017, BTC reached a market cap dominance of 66% when it was close to 20,000 dollars, and then just a month later, various altcoins plummeted to 32.45%, signaling the end of the bull market.

I wonder if the script for this bull market's end will be a repeat of the last one.

3. Altcoin Issuance and Market Cap

There are several notable characteristics in the mid to late stages of a bull market:

1. Many altcoins rise completely without reason, often increasing several times or even dozens of times without any fundamentals, until they pull up to the point where you are convinced or can't help but jump in.

2. Many altcoin valuations are exaggerated, especially for star altcoins, which can reach market caps of hundreds of millions or even billions of dollars, yet have very few users. Everything seems expensive, and people are afraid to buy.

3. New projects are emerging endlessly, making it dizzying and overwhelming, impossible for anyone not working full-time in the industry to keep up.

In the second half of last year, data spoke for itself. Projects like AAVE, Uniswap, and SNX, as leading DeFi projects, had solid data support in terms of user numbers and TVL, making their price increases seem "reasonable."

Now, it can be seen that altcoins have entered a stage of "unreasonable behavior," where having fundamentals and data support is no longer important. New projects are popping up every day in various WeChat and Telegram groups, launching with market caps starting at over a hundred million dollars, even if they have no users at all…

From this perspective, we seem to be in the mid to late stages of the bull market.

4. Bitcoin Exchange Balances

A significant characteristic of the late bull market is that a lot of Bitcoin flows into exchanges for cashing out. It is precisely because these people cash out that prices drop, leading to the end of the bull market and the onset of the bear market.

If you look at this indicator, it feels like the bull market still has a long way to go because Bitcoin is currently flowing out of exchanges, and the amount of Bitcoin on exchanges has been decreasing over the past year.

If we take this indicator as a standard, it feels like we are still at the beginning of the bull market, which is not an exaggeration at all.

5. ETH/BTC Volatility

This is a relatively unconventional indicator. In the last bull market of 2017, ETH/BTC experienced almost rollercoaster-like volatility, peaking at a volatility rate of 15%, while in this bull market, ETH/BTC's volatility has remained below 5% for a long time.

The reason may be related to the poor fundamentals of ETH in the last bull market, which had basically become a 1CO tool, while this round relies on strong data support from DeFi, NFTs, and a style of BTC moving together in the same timeframe.

So this indicator may not be effective in this bull market, but based on past experience, a tightening of ETH/BTC volatility usually means we are still some distance away from the end of the bull market.

6. Jiang Zhuoer’s Bitcoin 60-Day Index

This is an index that many people are familiar with, created by Jiang Zhuoer. The logic behind the index is that when a bull market reaches its end, market sentiment becomes frenzied, and bubbles become severe. When the short-term price increase exceeds the speed at which new participants and new funds enter the market, the bubble will burst, and the bear market will begin.

This process can be described mathematically as "60-day cumulative increase" being too high. According to historical data from past bull markets, the 60-day index in 2017 was 140%. In February, we just broke through 100%, and now, due to BTC's prolonged sideways movement, it has dropped to 35%.

So it feels like if a bear market is coming, we need to push past 100% increase again; otherwise, that wave of 105% in February would be the peak of the bull market? This is hard to believe. In any case, when the 60-day index approaches or exceeds 100%, it is a day you need to be cautious.

7. Google Search Index

This is also a commonly used index that reflects the public's concern about Bitcoin. Generally speaking, when the search index spikes, it is one of the signs that the bull market is nearing its end.

Aside from January and February, it seems we are still far from the end of the 2017 bull market.

8. Conclusion

This bull market may be the most perplexing. In the last round, aside from BTC, everyone was just making empty promises; there were no real applications for blockchain, and nothing could break out of the bubble, so the bear market was justified—a big bubble that burst with a poke.

In this round, BTC has started to gain real recognition from institutions and the traditional financial sector, beyond just insiders. Big companies like Tesla have begun to allocate, many pension funds have started purchasing, ETFs are not far from approval, Coinbase is about to go public, ETH has found its direction, and DeFi has been proven effective.

Innovation is happening every day, with user numbers, locked value, and cumulative income all continuously growing. Even ETH is overflowing to other chains because one chain can't handle it anymore. NFTs have also begun to "break out" through crypto art and platforms like NBA Top Shot.

The upcoming hot topics include Uniswap V3, Layer 2 solutions like Optimism and ZK, Polkadot's parachain auctions, and Dfinity's redefinition of blockchain applications and the world computer…

Hot topics are emerging one after another. An eternal bull market? No one really knows; all we can say is don't fantasize about selling at the peak. Taking profits at any time is correct; at least you should first recover your principal.

For example, you can sell some Bitcoin at 60,000, some at 80,000, and some at over 100,000. Whether you use the money to buy a house, a car, a watch, or a bag to improve your life, or convert it into mining machines or stablecoins for continuous income, the key is not to go all in as the bull market approaches its end.

After all, this may be the last round of dividends that ordinary people can participate in.