The Stages of a Crypto Bull Run Explained

Crypto bull runs happen in distinct stages, each with its own pattern. Here’s a breakdown of these stages and what to watch for:

1. Accumulation Phase 🐋

After a market drop or bear phase, big investors known as “whales” and savvy traders start buying crypto at low prices. During this phase, not many people are paying attention, and trading activity is low. Prices are stable and don’t move much because public interest is minimal.

2. Early Rally Phase 🚀

Buying pressure slowly increases as more investors begin to buy, causing prices to rise, although it might not be noticeable at first. Experienced traders and analysts spot signs like price breakouts or sudden increases in trading volume, suggesting the market could be turning bullish.

3. Public Participation Phase 📢

As the price rise becomes noticeable, more people start taking notice. Retail traders and the media start talking about it, bringing in more buyers, which causes prices to rise even faster. Fear of missing out (FOMO) kicks in, and many jump into the market, pushing prices higher.

4. Euphoria Phase 🎉

Prices reach new highs, and market sentiment becomes very positive. Media hype and excitement cause even more people to buy in. Many inexperienced traders believe prices will keep rising indefinitely, leading to sharp price increases. This is often when the market feels unstoppable.

5. Distribution Phase 💸

At this point, big investors and whales start selling their crypto to take profits. As they sell, prices begin to slow down or even drop a little. Retail traders, unaware of the signs, continue to buy, not realizing the market might be peaking. This phase is where big investors “distribute” their crypto to new buyers before prices drop.

6. Downtrend and Correction Phase 🛑

As more people start selling and demand for crypto decreases, prices begin to fall sharply. Fear replaces excitement, and many traders panic-sell their assets. This leads to a significant drop in prices, and the market enters a correction. This stage can sometimes bring the market back into a bear phase, and the cycle may repeat itself.

Final Thoughts 🌊

Crypto bull runs are fast and intense, driven by both emotions and market conditions. To be successful during these runs, traders need to pay attention to the different phases, watch for signals, and manage their risks carefully.

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The Stages of a Crypto Bull Run Explained was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.