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A market cycle is a regular up-and-down trend in asset prices in financial markets, especially volatile markets like cryptocurrencies. This cycle consists of four main phases, of which the bull market and the bear market are the two most important. It is very important for investors to understand these cycles.

1. What is a market cycle?

A market cycle is a continuous pattern of economic or market trends that repeats over a period of time. In each market cycle, asset prices and investor sentiment follow a specific pattern. A typical market cycle consists of four main phases, the first of which is the accumulation phase. During this period, asset prices are at their lowest. Experienced or intelligent investors start buying assets quietly. There is a sense of distrust and fear in the market. The second is the markup/growth phase, when asset prices start to rise, and ordinary investors enter. This is the initial phase of a bull market. The third is the distribution phase, during which the price reaches its peak. Experienced investors start selling their assets to the general public. There is a spirit of euphoria and greed in the market. The fourth is the decline/panic phase: During this period, the price starts to fall rapidly. This is a characteristic of a bear market, where investors sell in panic.

2. Bull Market - Optimism and Uptrend

A bull market is a period when the price of a particular asset or the overall market continues to rise for a long period of time and there is an expectation that the trend will continue. The asset price is constantly making new highs. There is optimism, confidence and expectations of profit among investors. There is more demand than supply, which increases buying pressure. New investors, the mainstream media and the general public enter the market during this period, often near the market peak. Greed and FOMO (Fear of Missing Out) are the main drivers of this period. Investors often take large risks and think that the price will only continue to rise.

3. Bear Market - Decline and Negativity

A bear market is a period when the price of an asset or the overall market continues to decline for a long period of time and there is a risk that the downward trend will continue. The asset price has fallen by at least 20% or more from its recent peak. There is doubt, fear and panic among investors. There is less demand than supply, which increases selling pressure. Many investors sell their assets due to fear of disappointment and loss, which accelerates the decline. Fear and despair are the main drivers of this period. Many weak projects are closed during this period. Experienced investors use this period as an accumulation phase.

4. Peculiarities of market cycles in cryptocurrencies

The cryptocurrency market, especially Bitcoin, shows more extreme behavior in market cycles than other markets. The crypto market can transition from bull to bear or bear to bull much faster than other markets due to low liquidity and regulation. The Bitcoin halving process (where mining rewards are halved) is often considered to be the beginning of a long-term bull cycle. During both bull markets and bear markets, crypto prices are much more volatile than traditional markets. Understanding market cycles helps investors with risk management, when to buy and when to sell. Today's discussion concludes here. I hope you've found it interesting. Please share your thoughts on today's topic. Prayers for everyone. May everyone be well. Amen.

Me behind the camera & keyboard

I’ve always loved sharing my passions with you — from crypto and movie reviews to photography, storytelling, and blogging. Now, continuing that creative journey, I’ve stepped into a brand-new world — Gaming ! 🎮 | 🎥 On my YouTube channel Bokhtiar The Survivor — I’m consistently working to bring you the raw thrill of my gaming experiences — the emotions, the excitement, and those unforgettable moments that make every game feel alive.