Simple market cycle analysis. Where are we in the cycle?

Let’s figure out where we are in the current cycle by using simple market cycle analysis.

You do not need fancy technical analysis skills to be a good swing trader but it does help. I’m going to keep this simple and discuss a way to analyze markets with nothing other than a standard market cycle chart and market sentiment.

We are going to work from top to bottom, as most people buy in at the top.

(1) Euphoria Stage

Do you remember when Bitcoin hit 68k USD and everybody thought we were for sure going to 100k? That was the euphoria stage. We followed that with a sustained dump followed by a slow and steady pump to the “double top” this was truly a bull trap. This specific scenario wrecked A LOT of people including experienced traders.

(2) Complacency

We trended down a bit from the double top, and consolidated. This was the complacency phase. It will get better. It always does… right? Let’s just hold.

(3) Anxiety

Prices continued down and we entered the anxiety phase. This is where we really start to wonder if things will get better, or if we simply fucked up. At this point you should always trust your gut. It’s usually right.

(4) Denial

You guessed it! Prices went even lower. This is the denial phase. We convince ourselves our investments will come back, even though we know they probably won’t anytime soon. ADA is a great project. This is just a healthy correction.

(5) Panic

This brings us to the panic stage (capitulation) the big FTX crash. Everybody sells off, this causes bank runs. “Crypto is going to zero” Exchanges and miners fold.

(6) Anger

We followed the FTX crash by entering the anger phase. We are PISSED OFF. Everyone hates Sam Bankman Fried. This is all his fault right? Public enemy number 1. Fuck SBF!

(7) Depression

We forget about how mad we are at Sam and his beautiful girlfriend Caroline and enter the depression phase. We just give up. This were things get interesting and we actually have to analyze how market cycles work. This is the phase where you need to do the opposite of everything your body and brain is telling you to. It’s the hardest part of investing.

-Crypto cycles-

This next part is very important.

(1) Accumulation phase

The depression phase is where you gave up and sold. Crypto is done. The depression phase is also known as the “Accumulation phase” this is where the whales and “smart money” buy up all the coins you liquidated for the cheapest price they will ever be again. You effectively sold bottom. It’s only up hill from there. Oops!

(2) Run up phase

The run up phase also known as “disbelief” is when the price starts rising and everybody thinks “this is just a bull trap” sound familiar? Thought so! This is where we are RIGHT NOW. The price continues to rise and everybody thinks buying at these levels is dumb because the bull trap will be huge! (Thanks Reddit for the good advice)

(3) Hope!

The price continues up, quick at first and then slow and steady. We are entering this phase right now. We are somewhere between disbelief and hope.

Reddit is becoming bullish, hopium is rising, all is well in crypto. The people who thought we were in a bull trap start buying here. They were wrong about the bottom not being in. This is truly the bull run…. Or is it…. ? Price goes even higher. We’re gonna be rich!

(4) Bear trap.

Your coins sell off. Prices decline rapidly at first, and then slow and steady for months. This is what most people call the bull trap, but it’s really a bear trap. You sell at the bottom and give up, the price sky rockets! This is the last time we see these levels.

(5) Optimism

Finally!! This is the real bull run. It’s up hill from here. Everybody becomes a genius investor and many become temporarily millionaires.

(6) Belief

You truly believe this will last forever. You’ve made your first million. You’ll never lose it. Might as well make the whole family rich as well. Let’s tell everyone we know to invest. It’s easy. You give them your genius advice and they accept it once you show them all the money you made.

(7) Thrill.

This is amazing. We’re all rich! Let’s go Doge coin!!!! $1.00 coming soon!! IM THE NEXT WARREN BUFFET OF CRYPTO. You tell Burger King to fuck off and quit your job.

(8) Euphoria

We are now at all time highs. Doge is at $1.00 but it’s going to $10.00 for sure! Let’s go! Grandma! BUY DOGE! Elon is going to use it on Twitter it’s for sure going to $100. Market cap doesn’t really matter guys….little do you know.

It’s only down hill from here. Enter complacency phase this can only end one way. The depression phase. You type up your resume and do the walk of shame back into Burger King.

This is a complete market cycle summed up.

I believe we are in the hope/disbelief stage. I have used other technical analysis to confirm these theories and that this run is almost identical to 2019 but I wanted to keep this post simple.

This is not financial advice and nobody knows what’s going to happen. We can use the market cycle chart analysis to make educated decisions that are better than simply guessing.

Where do you think we are in the cycle and why?