How to Spot a Crypto Bull Run Top Using On-chain Data

Euphoria doesn’t feel dangerous until it’s too late. Here is how a crypto bull run unfolds and what on-chain data showed before major Bitcoin tops.

In November 2021, a friend called to ask how to buy Bitcoin. Before then, he had never owned any cryptocurrency. For the previous three years, he told anyone who would listen that crypto was a scam. Yet he watched Bitcoin climb from $10,000 to $69,000 until the price became too loud to ignore. By the time he called, he no longer wanted to know whether he should buy. He only wanted to know how.

Bitcoin peaked at $69,000 on November 10, 2021. It did not return to that price for more than three years.

His call was no coincidence. When people who once dismissed an asset start asking how to buy it, the market has usually entered one of its final stages. Their purchases rarely move the price on their own. Instead, they show that the pool of new buyers is running dry. Most people willing to buy have already entered the market. Those investors have already persuaded their skeptical friends. As demand fades, prices have fewer sources of support.

This article breaks down how that process unfolds. It explains the psychological stages of a crypto bull run, what each stage looks like from the outside and feels like from the inside, what the on-chain data shows along the way, and how to tell the difference between a healthy correction and a cycle turning over. Understanding the psychology of a crypto bull run will not let you time the exact top. Nobody can do that consistently. It can, however, make you less likely to become the person calling to ask how to buy at the peak.

Why Crypto Markets Are Different From Traditional Markets

Every market has a psychological dimension. Stocks, real estate, and commodities all go through periods of overvaluation driven by optimism and periods of undervaluation driven by fear. Behavioral economics has documented these patterns for decades. Loss aversion, confirmation bias, herd behavior, and overconfidence are not unique to crypto. They are human behaviors that appear whenever people make financial decisions under uncertainty.

A crypto bull run magnifies these psychological forces in ways that traditional markets rarely do.

What Fuels Crypto’s Extreme Cycles

The first reason is continuous trading. Stock markets close each day, and exchanges can halt trading during periods of extreme volatility. Crypto markets operate 24 hours a day, seven days a week, across every time zone. A price move that begins at 3 a.m. can continue without interruption. Fear and euphoria have no opportunity to cool down before the next wave of buying or selling begins.

The second reason is global retail access. Anyone with a smartphone and an internet connection can buy crypto. There are no accredited investor requirements, brokerage approvals, or high capital thresholds. That accessibility is one of crypto’s biggest innovations. It also allows large numbers of inexperienced investors to enter the market at the same time, especially after prices have already risen sharply.

The third reason is the speed of narratives. Social media spreads investment stories faster than any previous communication technology. A single viral post can reach millions of people within hours. Celebrity endorsements, trending hashtags, and online communities can move prices quickly, especially in assets with limited liquidity. Rising prices attract attention, attention attracts buyers, and those buyers push prices even higher.

The fourth reason is the lack of widely accepted valuation models. Stocks have earnings, cash flows, and decades of valuation methods. Real estate has rents and comparable sales. Many crypto assets do not have equally established benchmarks. As a result, narratives carry more weight. When nobody can confidently say what an asset is worth, investors start treating price as evidence of value. The higher the price climbs, the easier it becomes for people to believe it deserves to be there.

The Six Stages of a Crypto Bull Run

Every major crypto bull run, from the 2013, 2017, 2020-2021, and 2024-2025 cycles, has followed the same psychological path. The timeline changes, the catalysts are different, and different assets lead the market, but the emotional pattern stays the same. That consistency is important because it reveals how people behave when financial uncertainty meets the possibility of extraordinary returns.

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What the On-Chain Data Shows at Each Stage

The psychological stages above are visible in sentiment, media coverage, and investor behavior. On-chain data offers another perspective. It shows what market participants are actually doing rather than what they are saying. The metrics below have been among the most useful for tracking where a crypto bull run sits within the broader market cycle.

MVRV (Market Value to Realized Value)

MVRV compares Bitcoin’s market capitalization to its realized capitalization, which values each coin at the price at which it last moved on-chain. When MVRV is high, the average holder is sitting on large unrealized profits. When it is low, the average holder is holding coins worth less than their purchase price.

The pattern has repeated across every major cycle. An MVRV above 3.5 has appeared before every major Bitcoin market top. It reached about 4.0 in December 2017 before the market reversed. In November 2021, it reached about 3.2 before the final peak. During the 2024 cycle, MVRV peaked at 2.9, lower than in previous cycles. That fits the diminishing returns pattern discussed in our Bitcoin halving history research and reflects a market with a much larger capital base.

An MVRV below 1 means Bitcoin is trading below the average acquisition price of all coins. Historically, that has marked periods of capitulation. MVRV fell to about 0.7 in December 2018 and about 0.8 in November 2022. Both occurred within weeks of a major market bottom.

SOPR (Spent Output Profit Ratio)

SOPR measures whether coins spent on-chain are sold at a profit or a loss compared with the price they last moved. A reading above 1 means holders are selling at a profit. A reading below 1 means they are selling at a loss.

During a crypto bull run, SOPR can briefly fall below 1 before recovering. That suggests holders who started selling at a loss quickly regained confidence, making the decline more likely to be a shakeout than the start of a sustained downturn. In a bear market, the opposite happens. SOPR struggles to stay above 1 because every rally gives holders another chance to exit before prices fall further.

Long-term holder SOPR is even more useful for identifying where the market sits in the cycle. It tracks wallets that have held Bitcoin for more than 155 days. When those holders begin spending coins at large profits, the market is usually entering the distribution phase described in Stage 5. During the 2021 cycle, long-term holder SOPR spiked at both the April and November peaks before major declines followed. Those spikes showed experienced investors selling into demand from newer buyers at prices well above their cost basis.

Long-Term Holder Supply

The supply of Bitcoin held by long-term holders, wallets that have remained inactive for more than 155 days, follows a consistent pattern across market cycles. During bear markets and the early stages of recovery, long-term holder supply grows as patient investors accumulate. During a crypto bull run, that supply reaches a peak before declining as long-term holders distribute it into rising prices.

The peak in long-term holder supply has preceded every major Bitcoin cycle top. When long-term holders begin reducing their aggregate supply, a trend visible on Glassnode and Look Into Bitcoin, they are taking profits after extended periods of accumulation. They are not always perfect at timing the exact top, but their collective behavior has aligned with every major market turning point.

Exchange Inflows and Outflows

Bitcoin moving from private wallets to exchanges indicates an intention to sell. Bitcoin moving from exchanges to private wallets points to accumulation, with buyers taking custody instead of leaving coins on exchanges for trading.

Sustained exchange inflows while prices are rising indicate distribution. Holders are using market strength to sell into demand. Sustained exchange outflows during or after a decline indicate accumulation, with buyers taking coins off the market.

The 2020-2022 cycle followed this pattern. Exchange reserves fell by about 380,000 BTC between November 2022 and March 2024 while MVRV recovered from 0.84 to 2.9. Buyers were absorbing supply from sellers and moving coins off exchanges long before prices fully recovered. The on-chain data pointed to accumulation months before the price recovery became obvious.

The Fear and Greed Index

The Crypto Fear and Greed Index combines volatility, market momentum, social media activity, surveys, Bitcoin dominance, and search trends into a single score between 0 (extreme fear) and 100 (extreme greed). It is less precise than on-chain metrics, but it is easy to follow and works well as a quick sentiment check.

Readings above 80 have historically appeared near periods of elevated risk. Readings below 20 have appeared near some of the best buying opportunities. The index cannot tell you exactly when to buy or sell. It shows how optimistic or fearful the market is at a given moment, making it a useful complement to the other metrics.

Altcoin Season and Capital Rotation

One of the clearest late-cycle patterns is the rotation from Bitcoin into altcoins. It follows the same sequence in every major cycle.

Bitcoin leads the bull market, reaching new all-time highs before the rest of the market. Institutional capital flows into Bitcoin first because it is the most liquid, established, and widely accepted crypto asset. Bitcoin dominance rises through the early and middle stages of a crypto bull run. As Bitcoin’s gains begin to slow, attention and capital move into large-cap altcoins such as Ethereum, where investors see greater upside. From there, capital moves further out the risk curve into mid-cap and small-cap tokens before reaching newly launched projects with little liquidity or trading history.

The final stage of this rotation is capital pouring into the riskiest assets in the market. In 2017, it was low-quality ICOs. In 2021, it was the memecoin boom, with SHIB rising more than 1,200% during its second major rally before the market turned.

When memecoins dominate trading volume and attention, the market is deep into the euphoria phase. The assets attracting the most interest have no product, no meaningful revenue, and little or no practical use beyond price appreciation. At that point, excitement has overtaken analysis, and history shows the cycle is nearing its end.

What Made the 2024-2025 Cycle Psychologically Different

Every cycle has its own character because the catalysts, participants, and macro environment are never the same. The 2024-2025 cycle differed from previous ones in a few ways.

The biggest difference was the arrival of institutional investors through regulated products, primarily spot Bitcoin ETFs, from the start of the cycle. Earlier cycles were driven mainly by retail investors during the accumulation and expansion phases, with institutional capital arriving later. In 2024, institutional demand was already visible by January, months before the halving, while retail sentiment remained cautious.

That changed the psychology in two ways. First, the accumulation phase was less obvious to retail investors because much of the buying happened through ETF inflows rather than on exchanges. Prices were rising, but the main source of demand was easy to miss unless you were following ETF flow data.

Second, institutional investors brought a different type of selling pressure. When large allocators reduced their Bitcoin ETF exposure, as happened during the $6.38 billion outflow streak between November 2025 and February 2026, the selling was fast and driven by portfolio allocation decisions rather than Bitcoin’s fundamentals. Investors who relied on long-term holder activity to identify distribution found it less reliable because a growing share of selling came through ETF redemptions instead of on-chain wallets.

The macro environment also differed from earlier cycles. The 2024-2025 market unfolded during a period of high interest rates, geopolitical uncertainty, and elevated economic policy uncertainty. Capital that might have flowed into higher-risk assets instead moved into US Treasuries yielding 4-5% and, increasingly, tokenized Treasury products on public blockchains. As discussed in our RWA tokenization research, those products gave on-chain investors a yield-bearing alternative that previous crypto cycles did not have.

The Patterns That Appear Before the End of a Crypto Bull Run

No single indicator has identified every market top with precision. But across four complete Bitcoin cycles, the same patterns have appeared before every major peak. Looking at them together makes it easier to judge where the market is in the cycle.

Four Patterns Worth Watching

The first is MVRV approaching or exceeding 3.5. As discussed above, this level has appeared before every major peak. It does not identify the exact top. In 2021, MVRV remained above 3.0 for nearly two months before the market peaked. Instead, it marks a period when the balance of risk begins to shift against new buyers.

The second is the long-term holder supply declining for several consecutive weeks. When the investors with the strongest long-term track record begin reducing their holdings, it deserves attention regardless of the market narrative.

The third is memecoin dominance surging. When assets with no meaningful fundamentals generate the most trading volume and social media attention, the market has entered its most euphoric stage. At that point, excitement has overtaken analysis.

The fourth is mainstream adoption reaching a cultural peak. When crypto appears in places it has never appeared before, from prime-time television advertisements to political debate and everyday conversations, the pool of new buyers is becoming smaller. The Coinbase Super Bowl advertisement in February 2022 is frequently cited as one of those moments. The game aired on February 13, 2022. Bitcoin never traded above its November 2021 high during that cycle.

The fifth is extreme leverage. When funding rates in perpetual futures markets remain persistently high, long traders are paying increasingly large fees to keep their positions open. That leaves the market vulnerable because a modest decline can trigger forced liquidations and accelerate selling. High funding rates have appeared before many of Bitcoin’s sharpest corrections, although not every one marked the end of a market cycle.

Why the Lesson Never Fully Sticks

If this pattern has repeated across every major crypto bull run, if the stages are recognizable, and if the same on-chain metrics and behavioral patterns keep appearing before major tops, why do so many investors still get caught?

The answer comes down to three reasons.

The first is that understanding a psychological pattern is not the same as being immune to it. Reading about loss aversion does not prevent loss aversion. Knowing that euphoria is dangerous does not make it feel dangerous while you are living through it. The combination of rising prices, constant optimism, and the satisfaction of being right is powerful enough to overwhelm even well-prepared investors.

The second is timing. The patterns described above have appeared months before previous cycle tops. Anyone who acted on them immediately would have missed part of the remaining rally. In 2021, MVRV crossed 3.5 in March, while Bitcoin did not reach its final high until November. Watching prices continue to rise after reducing exposure is uncomfortable, and many investors underestimate how difficult that feels in real time.

The third is that every crypto bull run has enough differences to convince people that the old rules no longer apply. In 2021, institutional adoption was used to argue that previous MVRV thresholds no longer mattered. In 2024, the same argument shifted to ETF demand and corporate treasury buying. Markets do evolve, and every cycle is different in some respects. But the underlying psychological cycle has remained consistent enough that believing “this time is different” has repeatedly been a costly mistake.

My Approach to a Crypto Bull Run

The on-chain data I watch most closely is long-term holder supply alongside MVRV relative to its historical range. Neither metric is enough on its own. When MVRV moves into historically elevated levels and long-term holder supply declines for several weeks, the market has reached a stage of a crypto bull run where I become much more cautious.

Since 2024, ETF flows have become just as important. Institutional buying and selling can move the market without appearing in traditional on-chain long-term holder data. Watching ETF flows alongside on-chain metrics provides a more complete view of where demand and supply are moving.

The pattern I find most useful requires no charts or technical indicators. I pay attention to the conversations happening around me. When people who have never shown an interest in crypto start asking what to buy, a crypto bull run is usually well advanced. When people who bought near previous highs are asking whether it is safe to come back, the cycle is still in its earlier stages. It is not a precise measure, but it has earned a place alongside the data.

The friend who called in November 2021 eventually recovered his losses. It took three years. He sold near the 2022 lows, convinced the recovery would never come. He bought back near the 2024 highs, convinced this time was different. His experience was not the result of a lack of information. He had access to the same data as everyone else. It was the difference between understanding the psychology of a crypto bull run and being able to act on that knowledge when emotions took over.

That gap is the whole game. Narrowing it, even slightly, is what separates people who make it through multiple market cycles from those who don’t.

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