sharp rises (bull runs) and falls. Though each bull run is unique, they generally follow a similar pattern. Here’s a breakdown of the key phases:
1. Accumulation Phase
The accumulation phase is quiet, with little price movement. Institutional investors and long-term holders accumulate coins at lower prices, while the market remains relatively unnoticed. This phase sets the foundation for the next big price surge.
2. Uptrend: The Bullish Phase
As demand grows, prices begin to rise slowly. Positive news or institutional adoption fuels optimism, while retail investors begin to enter the market, hoping not to miss the rally. Prices start to show a steady upward trend.
3. Parabolic Growth
Here, prices increase rapidly, often at an unsustainable pace. Media hype, social media discussions, and a rush of new retail investors push prices to exponential highs. This is the most exciting phase but also the most risky, as prices can rise far above their true value.
4. The Peak.
The market reaches its highest point. Investor confidence is at its peak, but this is usually the time when "smart money" begins to sell. Signs of stagnation or a slight pullback in demand signal that the bull run may be coming to an end.
5. Distribution: The Sell-Off.
As the market stagnates or falls, experienced investors sell their holdings. Many retail traders, still hopeful, continue buying, unaware that the market is turning. This phase involves large sell-offs by institutional investors who have capitalized on high prices.
6. Bearish Phase (Correction)
A sharp decline in prices, often triggered by panic selling, marks the bearish phase. Many investors, now in a loss, start selling off their assets. This phase leads to the market adjusting before a new cycle can begin.
Conclusion.
Crypto bull runs are driven by cycles of optimism and correction. Recognizing the phases — from accumulation to the eventual correction — can help investors make informed decisions. Timing and discipline are key to navigating these volatile cycles.
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