The cryptocurrency market is often unpredictable, but a clear pattern has emerged in recent bull cycles. Understanding the typical phases can help maximize profits and avoid pitfalls. Here’s a detailed guide to the four stages of a crypto bull run—and where we are now.
Phase 1: The Bitcoin Boom 💥
What happens:
The bull run began with a sharp increase in the value of Bitcoin ($BTC). Bitcoin, often considered the “safe haven” of the crypto world, attracted smart and institutional investors. As it broke through psychological resistance levels and climbed to new highs, even experienced investors were amazed.
Why this matters:
This phase sets the tone for the entire cycle. Bitcoin’s rise generates widespread media coverage and public interest. Many retail investors begin to take notice, but only early adopters dare to invest in this phase. Bitcoin’s recovery builds confidence across the market, attracting new capital and encouraging investors to begin exploring other assets.
Phase 2: Ethereum Joins the Party 🔥
What happens:
As Bitcoin's momentum slowed, Ethereum ($ETH) picked up steam. Ethereum's ecosystem, especially with the rise of DeFi and NFTs, became a magnet for investors. Smart money profited from Bitcoin flowing into Ethereum, pushing the price to a new all-time high (ATH).
Why this matters:
Ethereum's rise sparked broader interest in altcoins. This was also when attention shifted from Bitcoin-only conversations to discussions of blockchain technology and use cases like DeFi, opening the door for other promising projects. Ethereum's rise set the stage for the next phase: high-cap altcoins.
Phase 3: Large Cap Altcoins Explode 🚀
What happens:
Once Ethereum reaches a certain threshold, capital begins to flow into high-cap altcoins—the top 20 cryptocurrencies outside of Bitcoin and Ethereum. Coins like Binance Coin ($BNB), Cardano ($ADA), and Solana ($SOL) typically see large gains. With more retail investors flocking in, FOMO (fear of missing out) kicks in, attracting the attention of the mainstream media and the general public.
Why this matters:
High-cap altcoins are safer than smaller coins due to their established communities and ecosystems, making them a logical next step for investors who are becoming more comfortable with risk. This is the stage where a lot of new entrants to the market are brought on board, often through platforms like Coinbase or Binance. This high-cap bull run acts as a “gateway” to more speculative investments, setting the stage for the final boom.
Phase 4: Altcoin Fever 💸
What happens:
The final stage is when things get crazy. As high-cap altcoins begin to stabilize, capital flows into low-cap coins and micro-cap tokens. These are often little-known or new projects that can deliver huge returns—sometimes as high as 10x, 50x, or even 100x. Retail investors, lured by the promise of “finding the next Bitcoin,” rush in, creating a frenzy. This stage tends to be marked by irrational exuberance as people race to chase returns.
Why this matters:
Altcoin Mania is often the most volatile phase, as prices can skyrocket, but the downturn is swift and brutal. Profits during this phase can be astronomical, but it’s also when many inexperienced investors enter, leaving them vulnerable to sudden crashes. Knowing how to navigate this phase—often by exiting low-caps before the peak—is crucial to protecting profits and avoiding significant losses when the bubble bursts.
Where are we? Phase 2!
We are now in the early days of Phase 2 — Ethereum and large-cap altcoins are starting to accelerate. Institutional money is flowing back into the market, especially Ethereum, signaling that we are preparing for a strong large-cap altcoin rally.
Pro tips to maximize profits:
Go with the flow: Focus on high-fidelity assets early on to build a solid foundation. As the cycle progresses, rotate profits from $BTC and $ETH into high-cap assets and eventually low-cap assets—but only when the altcoin craze is nearing its peak.
Timing is key: In the crypto market, timing your entry and exit is crucial. Avoid the temptation to go all-in on low-cap altcoins ahead of time. Remember, during Phase 4, profits can explode, but so can losses when the craze subsides.
Stay informed: The market moves fast. Keep up with the news, listen to insiders, and track capital flows. These insights can help you make better, more informed decisions.
Ready to ride the bull?
This crypto cycle is just getting started and the opportunities are huge. Buckle up and stay strong — there’s a lot more to come as we navigate the unique twists and turns of this cycle.