18, Oct 2023
Crypto Phases – How to Get Ahead of the Market to Maximize Your Profits
Market cycles are the recurring patterns of trading in a particular asset or crypto phases, and they can help you understand the best times to buy and sell in order to maximize your profits. Cryptocurrencies go through four phases during each market cycle: accumulation, markup, distribution, and markdown. By understanding what each phase means, you can get ahead of the market to maximize your profit.
Accumulation is the first stage of a market cycle, and it marks the point in time where the price of a cryptocurrency begins to rise steadily. During this phase, smart money investors accumulate undervalued assets because they believe the market has bottomed out. This phase can last weeks, months, or even years, and during it, you should look for signs of an upcoming bull run. These include little drawbacks and corrections, a rise in the trading volume of an asset, and fundamental news that impact the market.
The Evolution of Cryptocurrency: A Journey Through the Phases
Once the accumulation phase ends, the markup phase begins. The market moves to higher highs and a sudden increase in the demand for the token causes its price to rise significantly. Fomo investors start piling in and purchasing the asset as they feel fear of missing out, and it is a great time for technical analysts to get involved as the momentum of the market is clearly changing.
As the markup phase comes to an end, the distribution phase begins. The market becomes overrun with a mixture of greed and fear as people are hoping that the price will continue to rise, while others have already sold their assets. During this phase, you should look for head and shoulder trading patterns, double or triple tops, and negative sentiments that could easily trigger a bear market.