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Author Topic: 10 STAGES OF THE CRYPTO MARKET CYCLE  (Read 498 times)


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« on: September 18, 2023, 12:49:37 PM »
Stage 1: Hope
"Hope" is the first sign of recovery after the "serious doubt" phase (see Stage 10 - the final stage in the cycle). The market begins to show positive signs in a new uptrend. However, investors remain cautious, and only a small amount of money is being invested.

Stage 2: Optimism
Optimism is the second stage where prices are rising, and new capital is flowing into the market. This stage is reached when the market sustains a strong upward trend for several months. The market looks promising, and investors are comfortable putting money in.

Stage 3: Belief
Over time, optimism turns into belief. This stage is defined as one of the first signs of a growing market. Investors started seeking new opportunities in the market.

Stage 4: Thrill
Looking for alternative investment options can be a good idea if you know what you're doing. People may get carried away and excited, making random project choices because they believe that everything will turn out fine, and prices will surely rise. It's important not to get overly excited, as excessive excitement can be a sign that it's time to exit the market.

Stage 5: Euphoria
Emotions created by humans, nothing can stop them. Investors are overwhelmed by a market full of promises. There's only one direction - up. During this stage, "many foolish investors" will enter the market. There will be many articles about a growing market, such as "meeting the new young millionaires."

Stage 6: Complacency
At this stage, growth is showing signs of stagnation because people's expectations are not being met. The first signs of a market reversal begin to appear. This is a very dangerous stage where people think it's just a minor dip before the market rises again. Many investors are preparing for an upcoming market reversal.

Stage 7: Anxiety
Finally, people become aware that this growth cannot continue indefinitely. They see the market reversing, losing value. Fear of loss makes traders hesitant to exit the market, causing them to suffer greater losses.

Stage 8: Denial
However, the value of investments continues to decrease, and many investors refuse to sell, hoping for a price correction and a return to growth. Investors become defensive, believing they made wise investments. However, generally, almost no coins escape the overall downward trend.

Stage 9: Panic
The market continues to decline, and bears start to control it. Investors try to salvage their losses by desperately selling their investments because they fear losing everything. Typically, a major sell-off occurs at this stage.

Stage 10: Depression
People lose all hope and confidence in the current market conditions. The market is at its lowest point in the current cycle. This is where stability and correction begin. This stage can last a very long time.

These 10 stages repeat over time and define market cycles. Not all market cycles follow this chart, but it provides valuable insights into market cycle psychology. All markets go through short-term cycles. The timing and magnitude of these cycles are determined by risk (often very high in the crypto market). However, market cycles are challenging to predict. But we know that markets cannot keep rising indefinitely or drop to zero (in legal markets).

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« on: September 18, 2023, 12:49:37 PM »


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