By Nikki Yu Gillo, CMT

Parabolic Exhaustion

Identifying parabolic exhaustion is a powerful skill for spotting potential reversals in overheated markets.  Visually, price accelerates upward in a curved trajectory, resembling a parabola.  Early stages show steady gains, but later stages become steep and erratic.  The curve often ends with a large range near the top, signaling buyer fatigue.  Volume typically increases with price acceleration, peaking near the top.  A strong bearish candle closing below the curve often signals exhaustion and triggers short setup.  Historical examples such as the recent $GME Gamestop mania rallying 20X in January to February 2021 provide a template to what’s currently happening in $OPEN Opendoor which is also a meme play in 2025 rallying 19X in just 3 months from July to September 2025. History rhymes.  

Distribution: Parabolic Stops with Large Ranges 

Reminiscent of the blockchain craze in 2017, Eightco Holdings $ORBS and WorldCoin rallied several thousand percent to become a Worldcoin treasury company.  Digital Asset Treasuries aka DAT is another parabolic mania signaling caution on the markets.  Nothing has actually happened to justify this price surge other than the companies massively diluting its current shareholders to buy the more dubious blockchain tokens in the digital asset market. 

Animal Spirits Remain Euphoric: Lock in Significant Profits on Speculative Assets

We can find parabolic price moves across speculative sectors (AI, crypto, small caps).  Meme stocks or low-float names are showing multi-day squeezes and valuation multiples are expanding without earnings support.  This is a phase where investor sentiment is driven more by emotion and momentum than by fundamentals.  Use % gain over 1 week / 1 month and overlay volume spikes and RSI > 80 with high retail interest to screen for parabolic exhaustion.  Sell 25–50% into strength and trail stop on remainder.   Look for wide-range candles, failed breakouts, or bearish divergences to lock in significant profits on speculative assets. 

Nikki Yu Gillo, CMT is a Philippine Chapter Chair of the CMT Association.  She has over 20 years of experience working in Wealth Securities Inc. and runs a private investor community called Awesome10X. She can be reached at [email protected] 

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