The 4 Phases of a Bull Market
There are 4 phases of a bull market.
At the moment we are approaching the end of the second phase, the so-called upswing or early phase of the bull market.
In this post you will learn how to:
- Navigate each phase of a bull market
- Avoid the most common pitfalls.
Phase 1: accumulation
This is where we were for quite a long time.
We have witnessed many scary events such as the Luna crash, FTX crash, Binance scam and USDT unpegging.
However, it was during these periods that the major players accumulated significant positions.
No new liquidity is entering the cryptocurrency.
No volatility, no narratives, just depression among everyone.
The price action in the market was dull and unstable, which led to many weak hands exiting.
But now we see that this was only a preparatory phase.
Bitcoin soared to its all-time high and even surpassed it.
Don't sabotage yourself by taking rash positions on bad ideas out of boredom. Focus on survival first and the winnings will come later. Don't play a bad hand just because you're bored - wait for a good one.
— Build your position only in high-quality projects:
Look for projects that can thrive in the upcoming bull market. Focus on those with market fit, competitive advantages, active development teams, solid roadmaps, and strong financials.
The appeal of investing in undervalued legacy projects is strong, especially when you consider that their values have fallen 90% from their peak. However, consider this: Chances are the next cycle's top performers haven't emerged yet. people prefer to be in a completely new project than to revive an old one.
This phase is amazing for learning, not for a bull market. A bull market is about taking advantage of existing opportunities. use this period to deepen your understanding. You don't want to be caught off guard by a new protocol during a bull market and have to learn the ropes.
Phase 2: Acceleration (beginning of the bull market)
This phase is characterized by rising prices, which leads bears to become distrustful.
Bear market PTSD is holding you back from success.
last cycle we saw DeFi and artificial intelligence come onto the scene. What will catch our attention next? GambleFi? NFT revival? maybe DePIN? RWA?
There will likely be areas that we haven't thought of yet.
When the Fed finally cuts interest rates, it will open the floodgates to more liquidity in the market.
Clearer, cryptocurrency-friendly regulation from the US and other countries could be a significant catalyst for the growth of cryptocurrencies.
Improved wallets, easier account setup, and user-friendly apps can have a huge positive impact on attracting new users to our space.
Simply put, one major event can cause a domino effect.
This gradually spreads throughout their surroundings, repeating the cycle over and over again.
Phase 3: Peak
It is at this time that “ordinary” people begin to flock to the market, the retail.
That's when even your grandma will want to buy ETH and put it on a card.
The funny thing is that people enter phase 3 of 4, but in their minds they think they are entering phase 2 of 5.
Bull markets are self-reinforcing.
When prices rise, it creates FOMO, creating a positive loop that pushes prices even higher.
In the end everything goes up.
Just look at the charts for the 2020-2021 cycle.
Investing just $1,000 in shitcoin could potentially change your life.
FOMO and euphoria takes effect.
It seems that the festival will last forever, and it is at this moment that all rational thoughts recede into the background.
People quit their jobs to become full-time crypto degenerates.
Some are even selling their homes to invest in crypto assets.
But by thinking this way, they may be making their biggest mistake, because the peak may be very close.
The main question you probably have is: can you identify the top?
Yes you can try. Here are some signs:
- Everyone starts boasting about their cryptocurrency income.
— Mainstream media are starting to cover cryptocurrencies widely.
— Cryptocurrency YouTubers are starting to upload more than three videos per day.
— Popular brands are starting to mention cryptocurrency just for the hype.
- Celebrities get paid through sponsorships or launch their tokens/NFTs.
Remember, everyone will try to convince you that this time is different.
You have to fight your instinct.
The main thing at this stage is to focus on take profit levels.
- The party won't last forever.
— Take a few chips from the table while you can.
— your future-self hopes that you won't be too greedy.
If you never take profits, the market will take them back and teach you a very expensive lesson.
Phase 4: Decline
The bullish surge will reach its zenith and speculation will begin - was this a real peak, or are we at the beginning of a protracted "super cycle"?
People will tell you that this time is different and that we will all get rich.
Be wary of super cycle talk, Bitcoin extension theories, and questionable charts.
Remember that everyone has a financial stake in keeping the party going.
They need to retain the audience for as long as possible.
And everything starts again...
The information on this resource is addressed to an unlimited circle of persons, and is not an individual recommendation; It is exclusively informational and analytical in nature for our team own use, and should not be considered as a proposal or recommendation for the investment, purchase, sale of any asset, trading operations on financial instruments. It's your own responsibility what usage you will make about it. The views expressed reflect only the author’s exclusively personal view.
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