Technical analysis and fundamental analysis are two different ways of looking at cryptocurrencies. Technical analysis is like trying to predict the weather 🌦️. People use it to look at how the price of a cryptocurrency has changed over time and try to guess what might happen next. They look at charts and graphs 📊 to try and figure out patterns, kind of like solving a puzzle 🔍. Some popular technical analysis tools include:

Moving Average Convergence Divergence (MACD)

Relative Strength Index (RSI) and

Bollinger Bands

On the other hand, fundamental analysis is like being a detective 🔍. People use it to try and figure out how much a cryptocurrency is really worth. They look at things like how many people are using it, what the rules are, and how good the technology is. Fundamental analysts follow some rules to determine if a cryptocurrency is overvalued or undervalued1.

For example, if it is a Binance Smart Chain application, users should check the BSC scan to see the transaction history and other relevant information. They can also check the project’s social media platforms to learn about their activities and community engagement. By gathering and analyzing this information, fundamental analysts can make informed decisions about the value of a cryptocurrency.

Cryptocurrency is a digital or virtual currency that uses cryptography for security. It is decentralized, meaning it is not controlled by any government or financial institution. Cryptocurrencies are stored in digital wallets and can be used to buy goods and services online or traded for other currencies. According to a report by Chainalysis, the following countries are the heaviest users of cryptocurrencies around the world:

Vietnam (21%), India (12%), Pakistan (11%), Ukraine (10%), Kenya (9%), Nigeria (8%), Venezuela (8%), Turkey (7%), China (7%), and Russia (6%). The report also shows that among developed countries, cryptocurrency use was most widespread in English-speaking countries – first and foremost the United States, but also the UK, Canada, South Africa and Australia. Emerging economies India, China and Brazil also registered as heavy users . While there are risks associated with investing in cryptocurrencies, they also offer potential rewards for those willing to take on the risk.

Life has its cycles, as do the economy and the financial markets. But when it comes to the market cycles, emotions often get in our way.

We often do the wrong thing at different phases, buying exuberantly at market highs and panic selling at market lows.

Successful investors do the opposite

Meet the 10 stages of a market cycle 

Stage 1: Hope 

'Hope' is the first sign of recovery after "the serious disbelief" stage (see Stage 10 — last in the cycle). The market is showing positive signals for a new bull run. However, investors are still careful. Small amounts of money are being invested. 

Stage 2: Optimism 

Optimism defines the second stage where prices are rising as new capital is being invested. This stage is reached when the market has been in a sustained uptrend for many months. The market has a positive outlook, and therefore many investors are comfortable investing money at this stage. 

Stage 3: Belief 

As time goes by, the optimism turns into belief. This stage of 'belief' is defined as one of the first signs of a bull market. Investors seek new opportunities in the market. 

Stage 4: Thrill 

Searching for alternative investment options can be a good idea if you know what you are doing. People easily get caught up in feeling thrilled as they select random projects because they believe nothing can go wrong. Everything is running up. It is important to keep track of your excitement level as being overexcited is a clear sign for closing a position. 

Stage 5: Euphoria 

The end of a huge run-up is defined by euphoria. Human emotions are taking over, nothing can stop us now, it's all puppies and sunshine. There is only one direction — up. In this phase of the bull-run, the "stupid money" jumps onboard the train, this kind of money is the first to leave. At this stage, expect the press to report about the bull market, and you get the "meet the new young millionaires" articles. At this stage, the smart money is taking profit throughout the parabolic movement. 

Stage 6: Complacency 

At this stage, the bull-run is stagnating as people's lofty expectations are not met. The first signs of a reversing market start to pop up. This is a very dangerous stage as people think the complacency stage is just a short break before the bull-run continues. Many investors are ill-prepared for the upcoming market reversal. 

Stage 7: Anxiety 

Finally, people become aware that this bull-run can't go on forever. They see the market is reversing, losing value and money. 

Stage 8: Denial 

However, the value of your investments continue to drop, and many investors refuse to sell hoping for an even bigger correction upwards. Investors act defensively as they are convinced they have invested their money wisely. 

Stage 9: Panic 

The market continues to decline as a bear market has become the new reality. Investors try to save their funds by desperately selling their investments, as they are afraid to lose everything. Often we see a major sell-off happening at the panic stage. 

Stage 10: Depression 

People lose all hope and their belief in the existing market conditions. The market is at its lowest point in the current cycle (as will be noticed afterward). This is where stabilization and consolidation start building again. This stage can take a very long time. 

In conclusion, the market cycle is a series of stages reflecting the emotions and behaviour of investors. It starts with hope and progresses through stages of optimism, belief, thrill, and euphoria. However, as the market reaches its peak, complacency sets in and the first signs of a reversing market appear. This leads to anxiety, denial, panic, and finally depression as the market reaches its lowest point. Understanding these stages can help investors make better decisions.