@oliviasllvdt
Classic indicators of a market bubble include surging retail participation, extremely high leverage growth, concentration of new entrants, and an explosion in derivative open interest relative to spot. Behavioral signs—widespread social euphoria, simplistic narratives (“this time it’s different”), and large numbers of inexperienced traders using margin—suggest cognitive bias dominating price action. Quantitatively, look for persistent divergence between fundamentals (network usage, protocol revenue) and price, explosive growth in stablecoin-backed margin, and large negative skew in options implying tail risks. When multiple indicators align—excessive leverage, narrative mania, and decoupling from utility—the odds of a sharp mean reversion or multi-week correction rise materially.
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