A parabolic means that an asset's price rises vertically in a near-straight line on the chart, accelerating upward at an unsustainable exponential rate. These moves are characterized by 50-200% gains in days or weeks, driven by extreme FOMO, leverage, and euphoria. Parabolic moves always end in sharp corrections because they become mathematically unsustainable and represent peak emotional buying. Technical traders use parabolic SAR indicators and recognize the vertical angle as a signal to take profits immediately, not chase further gains.
Example:
Bitcoin's run from $10,000 to $20,000 in December 2017 took 17 days. It was going vertical on charts with near-daily 10-20% gains driven by mainstream FOMO and futures market launch. This textbook parabolic move peaked at $20,000, followed by an 80% crash to $3,000 over 12 months. Traders who recognized the unsustainable parabolic angle took profits, while those caught in euphoria expecting $100,000 Bitcoin held through devastating losses. Parabolic moves are gifts for sellers, traps for buyers.