Long Term Crypto Game: Understanding the Market Cycles
Cyclicity is a key characteristic of all financial markets, and the crypto market is no different. A typical cryptocurrency market cycle includes four distinct phases.
AccumulationThis phase happens after the market bottoms out, following stagnation. Investors gradually enter, purchasing assets at lower prices, anticipating future price increases.
Bull MarketThe market starts to rise as an increasing number of investors join in. Prices accelerate as demand outstrips supply
DistributionAfter reaching a peak and passing the state of euphoria, the market begins to lose momentum. Experienced investors & whales (large crypto holders) begin selling off their assets, causing prices to stabilize or even decline.
Bear MarketThe bear market is characterized by prolonged price declines. This phase can last months or even years as investors flee from the market in response to falling prices & negative sentiment.
Conclusion Crypto markets are cyclical, and understanding these cycles is crucial for long-term success.