hugetore.blogg.se - Cryptocurrency coins market

Actually making good investment choices based on all this information is way harder than knowing it all conceptually, because you are human, and thus you will be exposed to pressure to buy high (FOMO/Greed) and sell low (Fear). Here I’d warn you that knowing is half the battle.

Four major parts of a market cycle.įurther, one can stretch this concept in a few different directions to discuss other aspects of markets (for example I would consider the rotation of which cryptos or types of cryptos that are doing well at any one time to be a part of the overarching market cycle, I would consider volume and liquidity trends to be part of the market cycle, and I would consider the historic relationship between alts and Bitcoin to be types of market cycles, etc).Īnyway, that is the basic concept. Markdown) occur.Īccumulation, Markup, Distribution. NOTE: See an overly simple example of a Wyckoffian market cycle below where LTC/BTC’s four main phases of a market cycle (Accumulation, Markup, Distribution. The classic economic bubble is an example of this playing out in drastic form (it doesn’t always have to be so drastic), and the Wyckoff Price Cycle is an example of this being analyzed and tactics to deal with it being created (Wyckoff can apply even to shorter more subtle cycles within larger cycles). In other words, a market cycle is the natural wave-like pattern that all assets form as people speculate and react to the associated fundamentals, emotional states, and chart patterns that result on a mass scale. The concept being that human emotions and market mechanics create bubble-and-bust cycles called “market cycles.” Be we talking about a 100-year cycle, 10-year cycle, 1-year cycle, or cycles that happen within days, weeks, and months, the concept is the same. If you could suss out all emotion and get it right every time, all you would do is buy at the bottom (accumulate), ride the wave up, sell during distribution, and then exit or short the market on the way down. Or in simpler terms: accumulation, greed (AKA Bullish Cycle), distribution, fear (AKA Bearish Cycle), repeat. Bitcoin bottoms out in a messy pattern that can see a gradual grind down of the rest of the market ( anger and depression this is the accumulation phase range trade and accumulate).Bitcoin goes down even quicker as people panic sell (play BOUNCES – start closing shorts here).People get sad and panic ( anxiety to panic SHORT).Bitcoin goes down ( anxiety and denial SELL if you haven’t, SHORT and play BOUNCES – short the rip at resistance).Bitcoin is distributed high (this phase consists of the price action near the top all the way until complacency SELL).

People get excited and the price goes up even quicker as many FOMO buy (those who bought lower start to distribute some as they mark up the price it is wise to HODL and/or SELL through belief, thrill, and finally euphoria – start closing longs here).

Bitcoin goes up (it is wise to HODL through disbelief and hope – buy the dip at support).

Smart money, institutional investors, early adopters, etc accumulate Bitcoin low (they accumulate during a lower period that looks like anger and depression to those who held from the last peak).

With Bitcoin specifically, using the terms that describe the phases of a market cycle from the above chart (not official terms, but useful terms) it might look like this: Market Cycles in Cryptocurrency, originally published on Ībove is what a market cycle looks like on a chart.