When Does a Crypto Bull Run Typically End?

A crypto bull run is a period of rapid and sustained price growth, often characterized by euphoria and surging investment. However, no bull market lasts forever. History shows that crypto bull runs eventually peak and give way to bear markets, often after specific patterns and warning signs emerge. This analysis examines when a typical crypto bull run tends to end by looking at past cycles, technical and on-chain indicators of exhaustion, expert insights, and macroeconomic factors that can sap bullish momentum. The goal is to highlight recurring patterns and red flags that often precede the end of a crypto bull cycle.

Historical Lessons and Technical Signs in Crypto Bull Cycles

Crypto bull runs capture headlines with dramatic gains, but every surge eventually meets its end. Understanding historical bull cycles and the technical signals that accompany them is key to recognizing when a crypto rally is running out of steam. By integrating these insights into your strategy, you can better prepare for the transition from exuberance to correction.

Historical Bull Run Cycles: What History Tells Us

Source: TradingView

1. The 2013 Cycle:

Bitcoin’s ascent from around $145 to over $1,200 was meteoric—but the subsequent collapse, triggered by exchange failures and early regulatory moves, serves as a cautionary tale.

2. The 2017 Surge:

Driven by widespread speculation and new instruments like futures, Bitcoin leaped from about $1,000 to nearly $20,000. The peak was marked by institutional shorting strategies and regulatory crackdowns that ushered in a steep correction.

3. The 2020–2021 Rally:

With growing institutional adoption and ample liquidity, Bitcoin climbed from roughly $8,000 to almost $70,000. However, as monetary policies tightened, the bullish momentum gradually faded.

Technical Warning Signs to Watch

● Parabolic Movements and Blow-Off Tops: When prices climb in a nearly vertical, exponential fashion, it’s often a prelude to a sharp reversal.

● Volume Divergence: A healthy rally sees rising volume. If price continues to climb while volume drops, buying pressure is likely waning.

● Overbought Conditions: Indicators like RSI reaching extreme levels (e.g., above 90) signal that the market may be overextended.

● Trend Reversal Patterns: Patterns such as the “death cross” or bearish divergences in momentum tools often confirm that the bull run is about to reverse.

Decoding On-Chain Metrics: The Blockchain's Clues to Market Tops

Beyond traditional price charts, the blockchain itself offers a trove of data that can signal when a crypto bull run is nearing its end.

On-chain metrics provide a unique, data-driven insight into market sentiment. When multiple indicators point to extreme profit levels and shifting holder behavior, the blockchain itself is warning that the bull cycle may soon end. For informed investors, these metrics are invaluable tools for timing market exits and protecting gains.

We will now explore key critical on-chain metrics that reveal the market’s underlying health and forecast potential reversals.

1. Net Unrealized Profit/Loss (NUPL):

When most holders are sitting on large paper gains (NUPL above 75%), it suggests that profit-taking may soon intensify, often heralding a market top.

2. Market Value to Realized Value (MVRV) Z-Score:

A high MVRV Z-score (typically above 5–7) indicates that assets are trading at a significant premium to their historical cost, signaling potential overvaluation.

Source: lookintobitcoin.com

3. Spent Output Profit Ratio (SOPR):

A decline in SOPR from elevated profit levels toward break-even indicates that holders are beginning to cash in, a sign that the bullish phase might be ending.

Source: Glassnode

4. Holder Dynamics:

When long-term holders start selling and short-term trading activity surges, it suggests that experienced investors are offloading, paving the way for a correction.

5. Exchange Flows:

An increase in the volume of coins moving from private wallets to exchanges often indicates that investors are preparing to sell, which can lead to downward price pressure.

6. Network Activity Trends:

If network usage metrics (active addresses, transaction volume) plateau or decline while prices continue to climb, it may be a sign that new buyer interest is fading.

Macro Forces and Expert Insights: External Catalysts Ending Crypto Bull Runs

Crypto markets are not insulated—they are deeply affected by external influences. Therefore, the end of a crypto bull run is rarely driven by a single factor, but the result of a convergence of macroeconomic forces, regulatory shifts, and changes in investor sentiment. Keeping an eye on these external influences and expert insights means you can better anticipate when the bullish phase will give way to a period of consolidation or decline.

External Influences Shaping Market Cycles

● Monetary Policy and Liquidity:

Bull runs typically flourish in environments of low interest rates and abundant liquidity. When central banks tighten monetary policy, the resulting reduction in available capital often signals the end of a speculative run.

● Regulatory Developments:

Increased regulatory scrutiny or new restrictions can quickly alter market sentiment. Announcements of crackdowns or bans have historically precipitated major corrections in crypto markets.

● Economic Shocks and Changing Risk Sentiment:

Broader economic events—such as stock market corrections or geopolitical tensions—can prompt a shift from “risk-on” to “risk-off” behavior, causing investors to pull back from high-risk assets like crypto.

● Leverage and Liquidation Dynamics:

Excessive leverage amplifies gains but also increases risk. When the market turns, high leverage can trigger mass liquidations, accelerating the downturn.

Expert and Institutional Perspectives

● Institutional Profit-Taking:

Large investors often begin trimming positions at market peaks. Their cautious approach can be an early indicator that the bull run is unsustainable.

● Shifts in Sentiment:

Extreme optimism is a well-known precursor to market tops. When sentiment indicators transition from exuberance to caution, it often marks the beginning of a reversal.

Source: lookintobitcoin.com

● Quantitative Models:

Some analysts use models based on network usage and valuation thresholds to determine when the market is overextended. These models frequently signal that gains will soon be hard to justify.

Conclusion

A typical crypto bull run tends to end when a perfect storm of internal exhaustion and external pressure hits. Prices overshoot, early adopters cash out, new buyers wane, and some catalyst tips the balance. Historical bull runs (2013, 2017, 2021) all show a period of spectacular gains followed by a peak and then a steep decline, and in each case, there were warning signs that, in hindsight, signaled the top. If one combines historical insights, technical and on-chain indicators, expert commentary, and macro context, they can better judge when a roaring crypto market is likely nearing its end. While exact timing is difficult, being alert to the recurring red flags outlined above can help market participants navigate the transition from bull to bear with eyes wide open, hopefully protecting profits accrued during the good times and preparing for the next cycle when the music starts anew.

Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading guidance. Qualified professionals should be consulted prior to making financial decisions.