When will the bull market peak? How to design your own exit indicator?

Source: Talking Li, Talking Outside

In the past few days, there hasn't been much to discuss in the market. It seems that everyone is more focused on changes in macro factors, such as the direction of the Federal Reserve's policies and the U.S. earnings season. Of course, there are also some relevant developments in the crypto space, such as:

• It is said that Coinbase has received a subpoena from the U.S. CFTC, requesting customer data related to Polymarket.

• Grayscale announced that it is considering some digital assets for future investment products, including KAS, APT, ARB, TIA, HBAR, etc. (Don't just copy homework).

• Messari plans to lay off about 15% of its workforce.

• The U.S. Department of Justice is set to sue the operators of the cryptocurrency mixing services Blender and Sinbad.

• Pendle will initiate a $6.1 million airdrop to vePENDLE holders.

• The U.S. Senate Banking Committee will establish its first subcommittee dedicated to cryptocurrency.

• Circle donated $1 million USDC to Trump's inauguration committee and noted that the committee is willing to accept donations in stablecoins.

• Standard Chartered will provide cryptocurrency custody services in the EU.

• The Russian Ministry of Finance will sell Bitcoin assets seized from the Infraud hacker group (not much, just 1,032 coins).

• Nvidia's Jensen Huang's speech caused all quantum computing stocks to plummet (quantum computing will not be realized in the next 20 years).

• Animecoin released the ANIME token economics, and HYPE stakers can receive airdrops.

• Since Binance announced the launch of ZEREBRO (an AI Meme on Solana) perps, the coin has been on a continuous decline for over ten days (what else can be said, even the retail investors are crying).

… It feels like there are endless news every day, and how to quickly find useful information from the massive amount of news is a problem that needs constant improvement. Personally, I actually do not recommend spending too much time every day scrolling through news; I prefer to read more in-depth long articles or document-like materials. Of course, if you don't have that much time to read, you can also consider using ChatGPT or GroK2 to quickly extract the core content of documents.

Having talked about some information I've noticed in the past few days, let's continue to briefly discuss the topics of bull market top escaping and learning effectiveness.

1. About the issue of escaping the bull market top

A few days ago (January 10), Boss Heng in the group held a themed sharing session on escaping the bull market top and bottom fishing in the bear market. After the sharing, he also posted a summary document of over 7,000 words in the group and compiled more than 40 commonly used top escaping/bottom fishing indicators in Excel. It can be seen that Boss Heng's research on this matter is quite in-depth and thoughtful, which is worth learning from each of us. As shown in the figure below.

Here, I will briefly select a few of Boss Heng's viewpoints for everyone (some private numbers have been hidden):

• The market cannot have most people making money; in fact, every round is about finding new retail investors to take over. Most of the main funds will only build positions at the very bottom and distribute to the fortunate ones at the peak.

• The biggest good news and the craziest times are the moments of the most frenzied distribution.

• Opportunities to make big money only exist in the liquidity-dry bear market. The times when you lose big money are in the noisy and greedy bull market.

• My cost is below 20,000, and I have started to sell in batches at ** million as planned. This was the exit plan made after completing the buying in the bear market.

• Currently, there is theoretically less than ** days until the first possible peak, which means that we may face a significant correction at any time.

• The time when you least want to leave the bull market is when you should leave the most.

• When everyone lacks confidence, you should believe in hope. When everyone is full of confidence, you should doubt the risks.

Recently, many people have been discussing the topic of escaping the bull market top, but I have noticed that many people's approaches or thoughts on social media still only look at the price. For example, some KOLs tell you not to sell and to wait until it rises above $150,000 to sell, and some even confidently tell you that Bitcoin will definitely rise to $1 million this year. Then you obediently listen and go all in when Bitcoin is at $100,000, deciding to hold on and wait for wealth, but do you understand if those KOLs actually have coins? Or can their average holding cost be the same as yours?

Any trading should be based on your own position management, and we have discussed the topic of position management many times before. Interested partners can directly search and review through the e-book "Blockchain Methodology" (Volume 1 + Volume 2) from Talking Li, Talking Outside. As shown in the figure below.

On the basis of reasonable position management (suitable for your risk preference), we should combine some on-chain indicators, candlestick indicators, macro factors, news, or some KOLs' personal opinions for auxiliary judgment. This is a relatively rational investment operation idea. Of course, if you have formed your own "methodology" (we will discuss the issue of methodology later), you can also directly ignore some influencing factors.

Otherwise, if you are just following the crowd or trading based solely on your so-called feelings, you are likely just entering the market to provide funds.

Here we can give a specific example, just take a look at a Long-term Holders on-chain indicator, as shown in the figure below.

What can you discover from this single indicator?

Here are some simple references: From the indicator data in the above figure, it seems that some long-term holders (including Smart Money) are currently exiting, allowing the short-term holders who come in later to take over. The red area has just touched the lower dashed line position. From this indicator alone, it seems to be a dangerous warning signal, marking a new peak area in the relative cycle.

So, when one KOL tells you that BTC will rise to $1 million this year, and another indicator is warning you that you are entering a relatively dangerous area, what should you do to maximize your interests?

We cannot provide you with a specific answer to this question because everyone's position situation, risk preference, etc., are different. You need to find the answer that suits you.

Some can find greater profit opportunities at the most dangerous bull market top, while others may get stuck at the peak or even lose money during the most profitable bull market period. There is no so-called standard unified answer suitable for everyone in this market.

Moreover, different people view the issue of the bull market top differently.

Some KOLs believe that the current market is just the beginning and starting point of the bull market. I even saw some KOLs say that the bull market hasn't started yet. I don't know what basis these KOLs have for their judgments. If their vision has already extended to 20 years later, then I can agree that now is just the starting point of the bull market or that the bull market hasn't started yet; otherwise, they are misleading the vast majority of retail investors and novices. If we only look at it from a small cyclical perspective, then this round of Bitcoin has actually been on a bull run for quite a while since rising from the relative bottom of $15,000 to now. How can we say that the bull market hasn't started yet?

Of course, if you can also extend your vision to 10 or 20 years later, then it’s still the old saying from previous articles in Talking Li, Talking Outside: For the future, no matter when you buy BTC now, it’s not expensive, and you can always maintain a coin-based mindset.

But if your vision can only be within a few months, a few weeks, or even within a day where you have to trade multiple times, then you need to customize a strict trading strategy based on your position management and think about how, in such a high-risk market, with various institutions/teams/professional traders deeply (including insider) involved, you can defeat these trading opponents, or what skills (for example, you are proficient in candlestick indicators, you can access first-hand information…) or specialties (for example, you have more patience than most people, you have enough time and energy to study…) you have that can ensure you outperform most retail investors in the market.

In short, there is no standard answer to the question of when the bull market will peak. Whether it’s the articles shared by Talking Li, Talking Outside before, Boss Heng's live sharing a few days ago, or the escape strategies and views shared by other partners in the group, these can only serve as references for you. In fact, the question you need to ask the most is not others, but yourself or your own position.

As for ourselves, we have actually shared in previous articles that I successfully executed Plan A last December and have already sold 10% of my Bitcoin position. Next, I just need to continue to strictly follow the original plan. If it weren't for the sake of learning, recording, and writing articles, I wouldn't even look at any candlestick charts.

2. About the issue of learning effectiveness

In previous articles, we mentioned that for the entire year of last year (2024), we spent most of our time sorting out "methods," so we named the e-book collection of the previous year "Blockchain Methodology" (originally wanted to call it "Cryptocurrency Methodology," but still felt that the term blockchain sounded cooler). As shown in the figure below.

However, I recently discovered a problem: many people seem to be limited to the "reading" level when looking at e-books and are unable to apply what they learn, such as further completing the subsequent steps of "recording," "classifying," and "applying."

In fact, from my personal learning experience, any method or strategy we browse through others' content only completes the most basic level of "knowing or understanding," which is still a distance away from becoming one's own "methodology" and being put to use.

Here’s another example: in the e-book, we have introduced and shared many indicators related to Bitcoin, altcoins, etc. Taking Bitcoin indicators as an example, you may have seen 20 indicators, but if you want to make use of these 20 indicators, you should additionally complete the following new steps:

Recording: This means taking notes to record the indicators you see that you think will be helpful to you in a table. Before recording, you also need to plan the classification of the table according to your personal needs. If you are accustomed to using Excel, you can categorize it into sections such as indicator name, indicator address, current value, usage instructions, etc.

Classifying: As the amount of records increases, you will find that different indicators can actually be further classified, such as on-chain indicators, sentiment indicators, candlestick indicators, etc.

Applying: While continuously improving the above recording and classification, the next step is to try to apply these indicators in practice (hands-on) and continuously optimize them in conjunction with your position management. You can even try to form your own "unique indicators" based on this and visualize or data-ify your unique indicators through mathematical induction or calculation.

The above steps are theoretical, and next, I will provide a practical demonstration table draft based on the above theory from a personal perspective, hoping to give everyone some ideas. As shown in the figure below.

In the above figure, I added three columns based on my personal needs: data delay, whether triggered, and selling range. Then, based on the numerical results of these columns, I can create a simple mathematical formula, for example, using percentages for positioning, setting different weights for different indicators, and different weights accounting for different percentages. Finally, for example, if the comprehensive result shows a range of 0-30%, it indicates a buying opportunity; 30%-80% indicates a dollar-cost averaging or no action; 80%-100% indicates a phased selling opportunity.

Through this set of steps from "reading --- recording --- classifying --- applying," I can gradually form my own "methodology" and put it to use. The subsequent task is to continuously repeat and improve the previous four steps to make my "methodology" more effective, more aligned with my position management, and more adaptable to changes in market cycles.

Of course, the above are just my simple examples, and the table above is merely a temporary draft for demonstration purposes. What we are providing here is more of a method or thought. If you agree with this learning approach, I suggest you take the initiative to organize it according to your personal needs (i.e., do not leave comments asking me for ready-made tables or simply request me to create any tables for you). This will yield better learning and practical results for you. Alternatively, if you have better learning methods or suggestions, feel free to share them in the comments.