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In crypto, discerning the signals of market tops can feel like trying to read tea leaves. But where data meets market sentiment, you can often get a sense, rarely anything exact, of where the market might be headed.
In today's article, we take a look at five crypto-specific market signals that often precede periods of outsized corrections or volatility.
To be clear, this is all far from a science and is certainly not financial advice! Actually knowing when to pull the trigger is the art that crypto trader legends are made of, but below are five market signals (in no particular order) that, when taken in conjunction with other factors, are an interesting gauge for market froth.
5. ETH Gas Fees
Ethereum's gas fee spikes over 150 Gwei have consistently been harbingers of significant market adjustments and market tops that arrive weeks later.
For instance, gas spiked to 210 Gwei in March 2021, a month before April’s peak. Then, in October of that year, it rose to 157 Gwei – again, a month before Bitcoin’s all-time high! While, yes, gas did not reach the astronomical levels of earlier that year, this may be because of the rising prominence of Alt L1s around this time.
Moral of the story – when Gwei crosses 150, it may be best to start locking in gains.
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