Since the emergence of cryptocurrencies until now, every day we learn new things based on their volatility. By the way, there are some regulations that can predict cyclical crypto activities. For instance, bitcoin over has experienced periods alternating between high and low prices and a more common stage in the between, traders and speculators refer to it as a cycle. During the 10 years of the life of bitcoin, 3 cycles have happened the first peaked in 2011, the second in 2013, and the third in 2017.
Each crypto cycle lasts for 4 years. And have 4 stages as well.
First is the "Accumulation Phase", which happens when the market is at its lowest price. Experienced crypto traders consider it as a lunch pad. So, they start to accumulate assets.
In the second phase, professional traders keep buying, and the prices start to increase. as avidity to buy increases the "Market phase" emerges, and high-profile investors begin to sell. This slows the price increase and causes a pullback in the market. As in the accumulation phase, we see a change in investors' sentiments from negative to natural in the markup phase shifting toward bullish and euphoria.
In "Distribution Phase" sentiments are a mixture of hope, fear, and greed. Not just the investors' feelings about the situation but the market condition is volatile too. It happens when the prices are going to touch the peak point and most of the sellers and buyers left it to their sideways trading. After this, the sentients will turn negative.
The last phase is the markdown phase; in this level, the inexperienced traders sell their assets at a loss but others keep them for the next cycle. The sentiments are all negative during this period and it causes the price to reach its lowest level ever.
To sum up, cycles are affected by price fluctuations. In this way, before any investment people should pay attention to all the preset parameters that exist in the market. And try to rise their knowledge.
