Identifying an asset bubble can be challenging, but several indicators may signal its presence:
Rapid Price Increases: Unusually swift and sustained price hikes in a particular asset or market. High Trading Volumes: Increased trading activity, often driven by speculation rather than fundamental value. Leverage: High levels of borrowing to invest in the asset, amplifying both gains and potential losses. Media Hype: Extensive media coverage and public fascination with the asset or market. Deviations from Historical Trends: Prices significantly deviating from long-term averages or historical norms.