This chart was created by Jean-Paul Rodrigue - Hofstra University and provides a visualization of an asset bubble and the lifecycle of it, or let’s call it the DNA. Every asset bubble resembles this chart. Superimpose it on market tops like the Nasdaq, the Dow, oil, or any other asset that severely went POP and you can see the relationship to the DNA model shown in the chart.

Insert your asset and your relative time frame and try to use it wisely. Think very closely, is there any asset at the current moment that comes close to resembling this chart? Using it wisely and spotting the trends and market moves and hedging accordingly can help you in the long run. The chart tells us that any asset that truly is victim of a bubble pop must retrace all the gains accumulated during the smart money phase before the price returns to the mean.