Bitcoin price is back in price discovery mode, setting new record high after high. Most of the rest of the cryptocurrency market is also doing the same.
The conditions for a once in a lifetime money making opportunity are here, but if you blink, you could miss it. Making it much harder to see the peak, greed can blind even the wisest and experienced market participants.
But if you know the common signs ahead of time, you can look out for common quotes, phrases, and statements that when said en masse or in unison by the collective crypto community, then it is very likely time to start selling or hedging by going short, and closing out a portion of any longs in profit.
Here are some of the signs to look out for:
“Bitcoin is going to several hundred thousand dollars per coin and above.”
Will Bitcoin price hit six figures this cycle? Given that it’s less dollars away to $100,000 than it is to $10,000, this prophecy appears to be self fulfilling.
But when people start expecting several hundred thousand dollars per coin and don’t sell at $100,000 and above, they could get stuck holding the bag through another bear market. Why? Because Bitcoin price action has always been held within the boundaries of the logarithmic growth curve.
“Ethereum will flippen Bitcoin!”
Bitcoin and Ethereum both trade against the dollar, but ETH also trades against BTC on the ratio trading pair. Because of the supply difference, there is a chance that Ethereum could “flippen” Bitcoin by market cap, even if the price per coin of BTC remains higher than ETH.
When this starts being said, it is time to move altcoins back into Bitcoin or into USD, as altcoin season will be coming to its conclusion. Ethereum has plenty going for it, but it is unlikely that Ethereum will catch up and surpass Bitcoin. If it does, it will be temporary and even more of a sign the top is near.
“[Insert Coin] will kill Ethereum!”
If Ethereum is giving Bitcoin a run for its money, then rest assured other coins are being pitched as the next Ethereum. Ethereum killers are plentiful and already being pitched as such.
It is when one of these coins gains serious steam and actually comes close to unseating Ethereum that the altcoin season has become overblown.
“The dollar is dead.”
For many years, Bitcoin was pitched as a replacement for the global reserve currency, the dollar. For so long, this seemed impossible for too far off to seem realistic.
Today, BTC is accepted as legal tender in El Salvador alongside USD and it could be the start of the dominos falling. However, the dollar still reigns supreme and it’s collapse wouldn’t exactly mean the greatest condition for cryptocurrencies to thrive.
“Bitcoin is the new gold!”
Bitcoin is also not replacing gold anytime soon. The leading cryptocurrency by market cap has taken a big chunk out of the precious metal’s capital, but the bull run metals is about to kick into high gear.
Gold and silver are on much longer market cycles than crypto considering how mature the market is. There is also trillions of capital already in gold taking way more to move the needle than in Bitcoin. The gold standard isn’t going away completely any time soon.
“It’s a new paradigm.”
This is a commonly used comment that is used alongside the market cycle psychology chart. When crypto investors begin making such statements, either seriously or as a joke, take it as a dead serious sign the top could be near.
The assumption that “this time is different” is one of the most costly mistakes that investors can make.
“The bull market will never end.”
Assuming that the conditions that led to a bull market cannot end, is another mistake investors make near the peak. Greed can be blinding and there is no moment that greed is as blinding as it is when the top of a bull market is here.
When prices are soaring, it is difficult to pull the trigger and sell. It is also hard to imagine things changing, but when they do, it’s always too late.
“Institutions won’t let the price drop.”
Institutions or so called smart money bought in, so they also will want to protect their positions is what many believe. But the truth is, they aren’t called smart money for no reason.
Institutions will be the ones selling their coins ahead of when everyone else wants to sell theirs. Institutions might front run $100K because they may make sure their orders fill. They’ll re-buy back lower for the long term with profits, never selling all their assets in the first place.
“It’s a super cycle!”
This is similar to the new paradigm comment but warrants its own call out. Crypto investors are expecting a dramatic super cycle in Bitcoin, but they aren’t realizing that the cryptocurrency is coming to the end of a five-wave super cycle.
Markets move up in three waves, with two corrective waves alternating in between each upwave. The bull market in 2013, 2017, and 2021 are the three up waves and each bear market acted as the corrective wave. What comes next is likely the worst bear market ever, so be careful what you wish for with the super cycle talk.
“It’s just a dip. The market just needs to recover a bit after a correction.”
This is when denial begins to set in that the top isn’t it, when it really is. If and when that happens, it might be time to switch short with the award-winning mating trading platform, PrimeXBT.
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Because the market hasn’t yet accepted the trend change, the resulting down move is usually the sharpest and the shot heard round the world. When this happens, the bear market has begun.
Aftab Hussain is a versatile journalist who covers a wide range of news topics with depth and precision. His commitment to delivering unbiased reporting ensures that readers stay well-informed about the most significant events and stories shaping India and the world.