When will the price rise? When the inflow of funds in the market is greater than the outflow of funds, the price starts to rise. The early rise will attract more people to buy, and the price will further accelerate. Therefore, when the market price rises, it will show an accelerated rise from slow to fast. The price increase is a double-edged sword. While strengthening one trend, it is brewing another trend, that is, profitable buyers will have a stronger and stronger desire to sell after reaping a lot of profits. In addition, people who want to buy will also wait and see because of the high price.

When the funds sold are equal to the funds bought, the price stops rising. As time goes by, the funds sold are more than the funds bought, and the price starts to fall. The early decline will attract more people to take profits, and the price will fall further, so the market trend begins to reverse. The formation of a downward trend will further aggravate the market decline. Greed and fear are unchanging human nature. These two emotions will aggravate the change of market trends. Greed is the catalyst for the accelerated rise of the bull market, and fear is the catalyst for the accelerated decline of the bear market. When the market falls sharply, the funds sold will decrease, and the funds bought will increase. The market will gradually reach a new balance and the price will stop falling. Interest rates are also an important factor in the conversion of bull and bear markets in the big cycle. At the end of the bull market, there is usually a policy of the Federal Reserve to raise interest rates, which will aggravate the outflow of funds. At the end of the bear market, there will be a policy of lowering interest rates, which will aggravate the inflow of funds in the market.

The particularity of the currency circle, due to the excessive market value of Bitcoin, it is equivalent to the market. The rise of these rounds of bull markets all started with Bitcoin. In the early stage of the bull market, Bitcoin took the lead in leading the rise. After Bitcoin rose sharply, the funds flowing into the market began to flow into mainstream value coins, such as sol/avax/eth. When the mainstream coins also rose sharply, the inflow of funds began to flow into altcoins, such as imx/op/tia/ordi, etc. There are usually some fomo chaos in the late stage of the bull market. For example, at the end of the 2021 bull market, altcoins such as shib, which have no logic but huge gains, began to appear. In this round of bull market in 2023, there were chaos such as Bitcoin inscriptions. Generally, when such chaos occurs, it marks the end of the bull market. The most important thing in the currency circle is to grasp the cycle. When the worst altcoins rise and chaos such as shib/ordi appear, it is time to sell and stop profit, because this indicates that the funds flowing into the market are about to dry up.

Understanding the entire process of trend and cycle formation will help us better grasp trends and cycles, so that we don’t make the mistake of buying too late and selling too early, thereby earning cyclical profits and changing our class.