Crypto bull runs unfold in distinct stages, each with its own characteristics. Recognizing these phases can give traders a strategic advantage. Let鈥檚 dive into each phase:

1. Accumulation Phase

This phase typically follows a market downturn or bear phase. Savvy investors, including "whales" and seasoned traders, start accumulating crypto at discounted prices. Market activity is low, and prices remain stable due to minimal public interest. At this stage, most traders are still watching from the sidelines.

2. Early Rally Phase

As buying pressure begins to build, prices slowly start climbing. This early movement may go unnoticed initially, but experienced traders and analysts detect early signs such as breakouts or a rise in trading volume, hinting that a bullish shift may be underway.

3. Public Participation Phase

Once price increases become more pronounced, public attention spikes. Retail traders and the media start discussing the rally, driving even more buyers into the market. The fear of missing out (FOMO) brings a flood of new participants, which accelerates price growth and ignites widespread excitement.

4. Euphoria Phase

In this phase, prices reach new highs, and optimism surges. Media coverage and market enthusiasm attract even more buyers. Many new traders, drawn by the upward momentum, believe the rally will continue indefinitely, leading to sharp, rapid price gains. The market appears unstoppable, but caution is essential here.

5. Distribution Phase

Big investors and whales begin to offload their holdings, locking in profits. While they鈥檙e selling, prices might stabilize or dip slightly, but most retail traders are unaware of the market鈥檚 peak. This phase is a "distribution" of assets from seasoned investors to new entrants.

6. Downtrend and Correction Phase

As more participants begin selling and buying interest declines, prices experience a sharp downturn. Fear overtakes excitement, and panic selling intensifies the decline. This correction often ushers in another bear phase, resetting the market for the next cycle.

Crypto bull runs are fast and intense, fueled by both market conditions and investor emotions. To succeed, traders must understand these phases, recognize key signals, and employ effective risk management strategies.

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