4blow off Phase
Blow-Off / Peak
The final vertical move higher. Prices become completely disconnected from fundamentals. Trading volumes hit records. This phase can be brief but spectacular. Smart money begins quietly exiting while retail investors pile in at maximum enthusiasm.
Warning Signals
- Vertical price action
- Record trading volumes
- Extreme optimism everywhere
- Smart money quietly exiting
- New paradigm declarations
- Massive media attention
- Everyone talking about it
Common Mistakes to Avoid
- Trying to time the exact top
- Adding to positions at peak
- Ignoring position sizing
- Believing the hype at maximum
- Not having an exit plan
Detection Checklist
- Vertical price action (parabolic)
- Vertical price action (parabolic)
- Record-breaking trading volumes
- Record-breaking trading volumes
- New paradigm language prevalent
- New paradigm language prevalent
- Maximum media attention
- Maximum media attention
- Smart money visibly exiting
- Smart money visibly exiting
- Extreme bullish sentiment readings
- Extreme bullish sentiment readings
- Price disconnected from any fundamentals
- Price disconnected from any fundamentals