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Introduction

The crypto market has come alive with a strong Ethereum rally, pulling many altcoins along for an exciting ride. But with every surge comes the inevitable question: is this sustainable, or are we standing at the edge of a cliff? This week, Santiment's founder, Maksim, takes the lead to answer that question. Armed with a powerful suite of on-chain and social data tools, he offers a clear-headed analysis, free from hype and emotion.

Maksim’s approach is to let the data speak for itself. In this session, he reveals the exact signals he looks for to call a market top, from unusual activity on 4chan to the behavior of stablecoin holders in DeFi. His findings might surprise you and provide a structured framework for thinking about the current market.

0:35 - Is the Current Altcoin Rally Sustainable?

Maksim begins by addressing the central theme: the ongoing Ethereum and altcoin rally. He immediately frames the discussion around whether this move is sustainable or if the market has reached a local top. He sets a clear tone for his analysis, stating that opinions are formed quickly based on data. If the data isn't clear, it is better to wait for more information than to overthink it.

Actionable Tip: Establish a clear framework of key data points to watch, and trust the signals over emotional responses to market volatility.

2:05 - The "Alt Season" Mania Metric: How Social Dominance Can Signal a Top

The first metric under the microscope is the social media search volume for the term "alt season." Maksim explains that when discussions about an altcoin season reach a fever pitch, it is a powerful indicator of market sentiment. He points out that when the social dominance for this term—the percentage of all crypto conversations that mention it—crosses 1%, it signals that retail participants are fully convinced the good times are here.

Actionable Tip: Use a social analytics tool to track the "alt season" query; a sustained dominance above 1% could signal peak retail excitement.

3:59 - The Classic Topping Pattern: Using Social Divergence to Predict a Peak

Maksim shares one of the most reliable top-spotting patterns: social divergence. This occurs when an asset's price continues to climb, but the social media conversation about it begins to fade. This pattern indicates that the initial excitement is wearing off, even as the price makes one final push. "The market is still going for some time, but you see that discussion about alt season... going down," Maksim explains.

Actionable Tip: Compare an asset's price chart with its social volume chart; if price makes new highs while social volume trends down, it's a strong warning sign.

8:37 - Pro Signals: Contrasting Twitter's Divergence with 4chan's "Explosion"

Not all social platforms behave the same way. Maksim reveals a more nuanced strategy by comparing signals from different online communities. On Twitter, he looks for the classic social divergence pattern mentioned earlier. However, on 4chan, the signal is entirely different: a sudden "explosion" of conversation where mentions spike to extreme levels. "If I see both, that's it," Maksim states.

Actionable Tip: For higher-conviction signals, look for a combination of social patterns: a divergence on mainstream platforms like Twitter alongside a sudden conversational "explosion" on forums like 4chan.

10:58 - On-Chain Clues: What Borrowing Rates Reveal About Market Greed

Shifting from social metrics to on-chain data, Maksim examines borrowing and lending activity within DeFi. He starts by analyzing the behavior of stablecoin holders, particularly how much DAI and USDC are being supplied to low-risk yield vehicles. The core logic is to understand market participants' risk appetite. When investors are content with a safe 4-5% yield, it suggests they are not confident enough to deploy that capital into riskier assets.

Actionable Tip: Monitor the total supply of stablecoins in low-risk yield products; a stable or growing number suggests caution, while a rapid decrease indicates a shift toward risk-on behavior.

13:11 - A Wall of Worry? Tracking Stablecoins to Gauge Market Confidence

Expanding on the previous point, Maksim shows how parked stablecoins create a "wall of worry." A market that climbs while capital remains on the sidelines is generally healthy. The real danger signal appears when this money is rapidly withdrawn from safe havens to chase higher-risk opportunities. This rapid redeployment often occurs right before a market top, but the data shows it hasn't happened yet.

Actionable Tip: Keep an eye on the rate of change in stablecoin deposits; a sudden, sharp decline is a more urgent signal than a gradual one, indicating a rush to chase gains.

15:47 - The "Froth" Indicator: Spiking DeFi Yields Flash an Early Warning

Another key on-chain indicator is the borrowing yield for stablecoins on protocols like Compound. A sudden spike in these yields indicates strong demand for leverage. Recently, the USDC yield on Compound spiked to nearly 11%, a first warning sign of speculative froth. Maksim adds a crucial piece of context: "From last experience, it should go around 20%... this is very close to a top."

Actionable Tip: Monitor the borrowing APY for major stablecoins on platforms like Compound, MakerDAO, Aave, and others; if yields approach the 20% mark, it suggests extreme speculative demand.

18:48 - Checking Bitcoin's Health: Are Small Holders Showing Risky Behavior?

To get a complete picture, Maksim analyzes Bitcoin's on-chain health, focusing on small holders who often represent the retail crowd. Currently, these holders are not accumulating Bitcoin aggressively, a positive sign that widespread retail FOMO is absent. Furthermore, weighted social sentiment for Bitcoin is positive but not at extreme euphoric levels, suggesting a stable backdrop.

Actionable Tip: Track the supply held by smaller Bitcoin wallets (e.g., those with less than 1 BTC); a sudden, sharp increase in their holdings during a rally can be a contrarian indicator of a top. A portion of retail tends to accumulate near tops due to the peaking feeling of FOMO.

22:02 - Case Study (LINK): A Dangerous Spike in Funding Rates Emerges

To illustrate his points on a specific altcoin, Maksim pulls up the data for Chainlink (LINK). The first thing he notices is a "huge green spike" in aggregated funding rates. "Okay, that looks dangerous," he says, explaining this signals a heavy bias toward long positions, making the market vulnerable to a long squeeze where a small dip triggers cascading liquidations.

Actionable Tip: Before evaluating an asset, check its aggregated funding rates; extremely high positive rates suggest the market is over-leveraged and vulnerable to a sharp downturn.

23:59 - Are On-Chain Fundamentals Keeping Up? Searching for Network Divergence

Next, Maksim looks for a divergence between LINK's price and its on-chain network activity. A healthy rally should be supported by a growing number of users. If the price rises while daily active addresses decline, it suggests the rally is driven by speculation, not fundamental growth. As of the stream, he notes that LINK's network activity is "still strong" and not yet showing a clear divergence.

Actionable Tip: Overlay an asset's price chart with its daily active addresses chart; a clear divergence, where price rises but addresses fall, indicates the rally may lack fundamental support.

26:58 - Entering the Danger Zone: The MVRV Metric Signals Heightened Risk

The 30-day MVRV ratio is another powerful tool. This metric shows the average profit or loss of all addresses that have moved their tokens in the past month. For altcoins, Maksim considers an MVRV above 30% to be "risk territory." At the time of analysis, LINK's MVRV was at 29%, right on the edge of this danger zone, increasing the likelihood of profit-taking.

Actionable Tip: When analyzing an altcoin, check its 30-day MVRV ratio; if it climbs toward the +30% level, be aware that the risk of short-term profit-taking is significantly increasing.

29:26 - A Look at Solana: Analyzing On-Chain Data for SOL and its Memecoins

Answering a viewer's question, Maksim previews Santiment's new on-chain data for the Solana ecosystem. Since direct Solana data had some gaps, he uses BONK, a popular Solana memecoin, as a proxy to gauge the health and sentiment of the broader ecosystem. This shows how analyzing prominent memecoins can offer a raw look at speculative interest in a chain.

Actionable Tip: To gauge the speculative temperature of an L1 ecosystem like Solana, analyze the on-chain metrics of its most popular memecoins as a proxy for raw retail interest.

31:42 - Surprising Finding: Why This Memecoin Rally Might Not Be Over Yet

Analyzing BONK's on-chain data, Maksim looks for the same topping patterns but finds none. Network growth and transaction volume appear healthy and are moving in line with the price. "I cannot believe it, but I have to." he remarks. "You go to analyze with as empty a mind as possible and just accept reality." He suggests the rally may have more room to run.

Actionable Tip: Even if a rally seems irrationally exuberant, stick to your data framework; the absence of clear topping signals like network divergence suggests a top has not yet formed.

34:16 - Final Verdict & Weekend Outlook

Maksim wraps up by summarizing his findings. While several short-term warning signs are flashing, the major signals that define a definitive market top are not yet present. His final verdict is that a short-term correction is likely, but the market may still have enough strength for one more push higher. He ends with a word of caution, reminding everyone to remain vigilant over the weekend.

Actionable Tip: Avoid relying on a single indicator; form your market outlook by synthesizing multiple data points, from social metrics to on-chain health and derivatives data.

Conclusion

This livestream offered a masterclass in cutting through market noise with data. Maksim's analysis provides a clear framework for identifying potential market tops, moving beyond simple price action to look at social sentiment, on-chain fundamentals, and derivatives data.

The key takeaway is that while the market is showing signs of froth, the conditions for a major, definitive top are not fully in place. By combining multiple data points—from 4chan chatter to MVRV ratios—investors can build a more nuanced and objective view of the market. This data-driven approach is invaluable for making more informed decisions in the volatile world of crypto.

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