The crypto market has never lacked fervor and controversy. From the past 'meme coin' craze to today's cyclical volatility, every fluctuation in the market comes with clear signals. For investors, recognizing the signs before a new wave of market action not only allows them to seize opportunities but also to avoid traps. The following is an analysis based on historical patterns and market behavior, summarizing several signs that may appear before a new wave of market movements.
1. Abnormal activity on social media and public opinion
Each wave of enthusiasm in the crypto market often begins with a rise in public discourse. On various platforms, discussion volume will significantly increase. Certain keywords like 'DeFi 2.0', 'Layer 3', and 'AI + Blockchain' will suddenly become trending topics, accompanied by a surge of new users flooding the discussions. These discussions are often mixed with FOMO (fear of missing out) sentiment, as retail investors begin frequently mentioning 'the next hundredfold coin'.
More importantly, the discussion volume of 'meme coins' or low-quality projects will surge. These projects are often attractively packaged but lack substantial technical support, yet they quickly gain popularity due to community hype and KOLs leading the momentum. 'Meme' is an indicator—when 'meme coins' start dominating the screens, it signifies that the market has entered an irrational stage and is also a signal for capital flow.
2. Unusual growth in trading volume and on-chain activity
Before the market starts, on-chain data often shows early signs of unusual activity. Indicators such as trading volume on decentralized exchanges (DEX), the number of active wallet addresses, and gas fees will significantly increase. A rise in on-chain transfer frequency for small-cap tokens usually indicates early capital (smart money) positioning. Tools like Dune Analytics or Glassnode can be used to observe this data.
Meanwhile, data on deposits and withdrawals from centralized exchanges (CEX) may show anomalies. For instance, a large influx of stablecoins (like USDT, USDC) into CEX indicates that funds are preparing to enter the market. Conversely, a surge in withdrawal volumes of certain low-cap coins may indicate organized market manipulation.
3. Signals from technical analysis and fund flow
Technical analysis still holds reference value in the crypto market. Before a major market movement, the prices of major crypto assets (like BTC, ETH) typically undergo a period of low volatility consolidation, forming patterns like 'triangle convergence' or 'bottom raising'. Breaking through key resistance levels (like BTC's 200-day moving average) is often accompanied by increased volume, signaling a trend reversal.
In terms of fund flow, observing institutional trends is particularly important. Changes in Grayscale's holdings, inflows into ETFs, and large on-chain transfers are all signals of institutional entry. Additionally, a surge in the issuance of stablecoins (like Tether issuing more USDT) is usually positively correlated with the impending market activation.
4. Changes in macroeconomics and policy direction
The crypto market is closely related to macroeconomic factors. Before market movements, signals of a loose global economic environment may emerge, such as a rise in expectations for interest rate cuts by the Federal Reserve or a weakening dollar index. These factors can increase the attractiveness of risk assets, with the crypto market being the first to respond.
On the policy front, changes in regulatory direction are also crucial. For example, if a country announces a friendly policy towards crypto assets (such as tax reductions or a legalization framework), or if a certain exchange obtains a key license, it could trigger a surge in market sentiment. Conversely, news of strict regulation may temporarily suppress the market, but could also lay the groundwork for a subsequent rebound.
5. The metaphor of the 'meme coin' craze and selling timing
"Meme coins are indicators that guide the timing of selling." When the market enters the frenzy stage of 'meme coins', low-quality projects are hyped up, with valuations severely deviating from fundamentals, indicating that the market has entered an irrational boom period. This phenomenon is often accompanied by high leverage and excessive speculation, signaling that funds are about to withdraw.
Historically, surges in 'meme coins' like DOGE and SHIB often mark the market's peak areas. Smart money will gradually reduce their positions at this time, leaving the chips to retail investors chasing high prices. Therefore, when the 'meme coin' craze reaches its peak, investors should be highly vigilant and prepare for profit-taking or position reduction.
6. The cycle of psychological and behavioral patterns
The cyclical volatility of the crypto market is essentially a cycle of human greed and fear. Before market movements, retail investors' psychology typically shifts from skepticism to hesitation, and then to FOMO-driven buying. The community will see numerous 'wealth stories', such as posts going viral about someone getting rich from investing in a coin. These stories further stimulate market sentiment, creating a positive feedback loop.
At the same time, early investors or 'veteran players' tend to show cautious optimism. They may build positions at low levels but will gradually exit during the frenzy. Observing the comments from 'OGs' (original players) in the community often provides clues about the market stage.
How to respond?
In the face of signs of a new wave of market movements, investors need to remain calm and disciplined. Here are a few suggestions:
Data-driven decision-making: Closely monitor on-chain data, trading volume, and social media sentiment to avoid being overwhelmed by FOMO.
Diversification and risk control: Spread funds across mainstream coins, small-cap coins, and stablecoins, setting clear profit-taking and stop-loss points.
Beware of 'meme coin' traps: When low-quality projects start dominating, prioritize reducing positions rather than chasing high prices.
Pay attention to macro trends: Combine global economic and policy directions to assess the stage of the market's large cycle.
Conclusion
The volatility of the crypto market is like a tide, filled with opportunities and risks in its rise and fall. Before each round of market movements, the frenzy on social media, unusual changes in on-chain data, technical breakthroughs, macroeconomic trends, and the metaphor of the 'meme coin' craze all tell the same story: the market is brewing a new storm. Although I say, 'Let the memes come stronger'—in this carnival, only rationality and keen observation will allow you to laugh last.
