Understanding how market cycles work is key to helping investors and traders reduce risk and maximize returns in their crypto portfolios. Let’s dive into the 4 market cycles that every asset experiences and the emotions and trends associated with each.
Market cycles refer to patterns and trends that emerge during various stages of expansion or contraction. For instance, a Markup Phase is a bullish market cycle where people tend to be optimistic and greedy, leading to a strong buying trend. The other 3 major market cycles can also cause investors to have certain feelings and act in certain ways.
Accumulation occurs after the market has bottomed and the innovators and early adopters begin to buy, figuring the worst is over. Weak hands have sold and smart money is buying in.
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The Markup Phase occurs when the market has been stable for a while and moves higher in price. It can also be referred to as a Run-Up Phase or a Bull Market. This is when you see technical analysts buying into crypto projects and an early majority entering the market.
During this 3rd phase, sellers begin to dominate as the asset reaches its peak price. Bullish sentiment is changing to mixed sentiment and price momentum begins to slow.
As the last phase of the market cycle, a downtrend occurs when the asset price is tumbling downward. Also referred to as a Run-Down or Bear Market, the downtrend is a challenging time, especially for newer investors whose emotions are often running high.
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Now that you know what the cycles are, it’s time to learn how to beat the cycles and use market psychology to your advantage. What’s important to understand is that crypto markets act in a very counterproductive way:
This is the psychology of the market cycle and knowing about it is the first step in beating it. Traders and investors can try and read the market sentiment by spotting the varying market cycles. For example:
Lucky for investors, Quadency offers a number of strategies to monitor these market cycles and automate trades to capitalize on market sentiment, including:
Be sure to sign up for your free Quadency account today and make the market cycles work for you!
Market cycles refer to patterns and trends that emerge during various stages of expansion or contraction. For instance, a Markup Phase is a bullish market cycle where people tend to be optimistic and greedy, leading to a strong buying trend. The other 3 major market cycles can also cause investors to have certain feelings and act in certain ways.
Accumulation occurs after the market has bottomed and the innovators and early adopters begin to buy, figuring the worst is over. Weak hands have sold and smart money is buying in.
New to crypto markets? Check out our Beginner's Guide to the Trading Terminal.
The Markup Phase occurs when the market has been stable for a while and moves higher in price. It can also be referred to as a Run-Up Phase or a Bull Market. This is when you see technical analysts buying into crypto projects and an early majority entering the market.
During this 3rd phase, sellers begin to dominate as the asset reaches its peak price. Bullish sentiment is changing to mixed sentiment and price momentum begins to slow.
As the last phase of the market cycle, a downtrend occurs when the asset price is tumbling downward. Also referred to as a Run-Down or Bear Market, the downtrend is a challenging time, especially for newer investors whose emotions are often running high.
Learn all the Trading Order Types & How to Use Them at Quadency!
Now that you know what the cycles are, it’s time to learn how to beat the cycles and use market psychology to your advantage. What’s important to understand is that crypto markets act in a very counterproductive way:
This is the psychology of the market cycle and knowing about it is the first step in beating it. Traders and investors can try and read the market sentiment by spotting the varying market cycles. For example:
Lucky for investors, Quadency offers a number of strategies to monitor these market cycles and automate trades to capitalize on market sentiment, including:
Be sure to sign up for your free Quadency account today and make the market cycles work for you!
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Quadency is a cryptocurrency portfolio management platform that aggregates digital asset exchanges into one easy-to-use interface for traders and investors of all skill levels. Users access simplified automated bot strategies and a 360 portfolio view with a free account.
Disclaimer: The content of this article is for general market education and commentary and is not intended to serve as financial, investment, or any other type of advice.
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