The Four Different Phases Of Any Market

The market follows these four cycles. Be it any asset class that you wish to invest in, knowing these four market cycles let you take an informed decision.

Accumulation

The accumulation phase on the Ethereum Code review, as the name suggests is when the market participants accumulate stocks or any security into their portfolio. This phase occurs after the market bottoms out. During this phase, the smart investors feel that the market has bottomed out and they thus start to buy the security at a cheaper price to add to their portfolio.

The markup phase

This is when the market had been flat for quite some time but has now started to move up. The smart players are trying to get into the market. The major buyers at this level would be the Chartists who are able to see some clear indications in the market trend. This could include seeing that the market is making a higher high and the direction of the market changing. The media is conservatively pointing out that the end may be done

Now the market has started to move up as there is a clear indication that it is making higher lows and higher highs. The smart investors are sitting on profits. The retail investors, however, could spot the bullish move a little late but they now want to be apart of this market. Logic is overshadowed with greed.

 

Distribution

This is the third phase when the sellers start to dominate. The market is flat and the market sentiment is slowly shifting from bearish to neutral.

The bullish move is almost to an end and the market has mixed sentiments now. The market is mostly flat and trading in a range. This is an emotional time and the investors have mixed emotions of fear and greed. Valuations are very high. The sentiment is changing but what needs to happen is big news that can impact the negative move strongly. Once that happens the market starts to move down.

The market down phase

 

 

 

This is the last phase of the cycle. The investors who are still holding on to their positions are in a bad state. Most of them are holding on because their investment has fallen down to more than what their purchase price was. They wait for abuy sign but ultimately give up hope and sell their investments for a huge loss.