Four Phases of a Bull Market 💸
◾️ Phase 1: Accumulation: This phase occurs after a market decline when investors begin to buy assets at lower prices. Sentiment is generally bearish and the market sees a gradual increase in buying interest from informed investors.
◾️ Phase 2: Run-up: Prices begin to rise more rapidly as confidence returns to the market. The broader market begins to recognize the positive trend. This phase is characterized by increasing volume and market participation.
◾️ Phase 3: Distribution: Market peaks and early investors begin to sell their holdings to take profits. Newer investors, driven by optimism and FOMO, continue to buy, pushing prices higher. However, overall market sentiment becomes mixed as signs of overvaluation appear.
◾️ Phase 4: Run-down: The number of new buyers dries up and latecomers face losses as selling pressure increases. Sentiment turns bearish and the market corrects to a new low.
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