Crypto markets are cyclical. They generally follow a pattern of highs and lows. The price of a coin tends to rise when demand outweighs supply. However, interest begins to weaken after a while, and the price starts to fall. This rise and fall constitute one cycle.
After each cycle ends, a new one begins, forming a recurring pattern over time. Moreover, after each cycle, prices generally establish higher highs and lows. This is one of the reasons why experts suggest holding onto or buying more coins during a market crash. The hope is that owing to the cyclical nature of cryptocurrencies, prices will rise to new highs in time.
Further, after examining historical data, four distinct stages emerged within a crypto market cycle. Each stage has certain characteristics and pinpointing these stages can help you make better investment decisions. So, tag along as we describe the stages of a market cycle and how to identify them.
1. Accumulation phase
The accumulation phase refers to the period where a new low has been reached, and the prices have begun to flatten out. At this stage, panicked investors continue to sell their coins, fearing further price drops. However, seasoned investors and traders will see the accumulation phase as an indicator of a bull run.
This stage is characterized by marginally lesser volatility in the market. Therefore, it is the ideal time to jump into the market and buy the dip. The traders who purchase coins in the accumulation phase have plenty to look forward to in the next stage, the markup stage.
Continue reading: https://www.cnbctv18.com/cryptocurrency/understanding-the-four-stages-of-a-crypto-market-cycle-14612411.htm
After each cycle ends, a new one begins, forming a recurring pattern over time. Moreover, after each cycle, prices generally establish higher highs and lows. This is one of the reasons why experts suggest holding onto or buying more coins during a market crash. The hope is that owing to the cyclical nature of cryptocurrencies, prices will rise to new highs in time.
Further, after examining historical data, four distinct stages emerged within a crypto market cycle. Each stage has certain characteristics and pinpointing these stages can help you make better investment decisions. So, tag along as we describe the stages of a market cycle and how to identify them.
1. Accumulation phase
The accumulation phase refers to the period where a new low has been reached, and the prices have begun to flatten out. At this stage, panicked investors continue to sell their coins, fearing further price drops. However, seasoned investors and traders will see the accumulation phase as an indicator of a bull run.
This stage is characterized by marginally lesser volatility in the market. Therefore, it is the ideal time to jump into the market and buy the dip. The traders who purchase coins in the accumulation phase have plenty to look forward to in the next stage, the markup stage.
Continue reading: https://www.cnbctv18.com/cryptocurrency/understanding-the-four-stages-of-a-crypto-market-cycle-14612411.htm
