With the crypto landscape in the doldrums, but far from being a bear market, I found myself this morning looking up what the key signs are that might indicate that the tide is turning once again (into a bull run). These are the conclusions that I have drawn but always DYOR and don’t just take my word for it
The fact is that there is never one single metric that guarantees an incoming bull run. What really matters is when there is a confluence of a range of factors – a coming together of multiple indicators.
Remember a bull run is a time for increasing asset value (while remember profit is not profit until you take it) and a bear market is a time to accumulate more asset (although choosing which one is sometimes a challenge).
An early indicator could be a rising number of active wallets and new addresses shows increasing adoption, which will almost certainly see an increase in transaction volume; a sustained growth in daily transactions which shows real network usage as opposed to hodling.
For those of us who are technically minded (I am not so I am just regurgitating what I found) a “golden cross” (50-day MA crossing above 200-day MA) is a classic bullish signal, as is a sustained Relative Strength Index (RSI) score above 50 and most obvious of all price rallies, which are supported by a strong trading volume confirm an upward momentum.
For me the most obvious key indicator is institutional buying. Think about it there is a whole load of experts sitting in their offices somewhere who just know when to move on and asset and when not too. Institutional buying has the direct effect of (often) dramatically increasing the trading volume which then in turn drives prices up and can provide a kickstart. In some ways this is the same principle as whale activity, but for very different reasons (maybe there is an article in that too).
Finally, concerning the technical side if there is an expansion in liquidity it naturally follows there will be an increase in the TVL (Total Value Locked) which furthermore reflects confidence in broader crypto ecosystems. This factor bridges the technical with the psychological and with that it naturally follows that I mention sentiment within the macro-environment starting with the Fear & Greed Index: When it moves from “fear” to “neutral/greed” it is the start of a momentum that could also be a sign of early cycle optimism.
Watch the media they like to pick up on dramatic stories (good and bad) and increased media attention and retail participation also signal cultural momentum and finally other general financial factors provide a strong indicator, such factors may include lower interest rates (which increases borrowing or leveraging), dollar weakness, and favorable regulation, all of which can accelerate growth.
So as you can see there are a fair few factors to consider and none should be taken in isolation, rather they should be read together to get as fuller picture as possible and while I have not covered every factor here I have certainly tried to cover the most important.
As always stay safe and well my friends.
