The 4 Stages Of Crypto Market Cycle

Financial markets are defined by cycles of micro and macro movements, and the crypto market is no exception. These cycles recur throughout time, providing opportunities to potentially forecast future price fluctuations.

When one crypto market cycle ends, another begins. A crypto market cycle is essentially the time span between a market's peak and its bottom. It generally encompasses four distinct price trends triggered by various kinds of external factors. Crypto market cycles are typically seen to have four main phases. Different phases will react to dynamics differently at various points of the entire market cycle. The 4 phases of a crypto market cycle include accumulation, markup, distribution, and markdown.

Accumulation

The accumulation phase starts when the market stabilizes after a steep decline. Prices plateau, and volatility decreases. Panic-stricken traders are still selling their coins at this point, anticipating greater price reductions. Experienced traders, on the other hand, will perceive the accumulation period as a precursor to a bull run.

This stage is distinguished by slightly lower market volatility. As a result, it is an excellent moment to enter the market and buy the dip. Market sentiment is shifting from pessimistic to neutral, and savvy traders recognize this 'calm before the storm' as the optimal time to buy at a discount.

Price Volatility: Low

Trading Volume: Low

Market Sentiments: Disbelief, Hope

Markup (Bull Market)

In the markup phase, prices break resistance levels and begin a steady uptrend marked by higher highs and higher lows. Entrants detect market movements and capitalize on their technical analysis abilities. Growth is slowing since there are still sellers depressing prices. The bulk of early entrants are drawn to crypto as a result of media attention. Traders with experience can see the growing number of higher lows and higher highs. As FOMO and inherent curiosity boost trading and transaction volumes, prices begin to skyrocket. At this point, greed reigns supreme and logic takes a second seat.

Price Volatility: High

Trading Volume: High

Market Sentiments: Euphoria, Complacency

Distribution

The distribution phase occurs when early bulls begin offloading their holdings at elevated prices. This stage of the cycle is distinguished by a period during which the preceding phase's bullish attitude transforms into a mixed outlook. Prices are often trapped in a trading range that can persist for several weeks or even months. The distribution phase is an incredibly emotional moment for the markets, with traders seized by periods of utter terror intermingled with anxiety as the market appears to be resuming its upward trajectory. Typically, sentiment gradually and steadily shifts, but an unfavorable geopolitical occurrence or particularly terrible economic news might hasten the changeover.

Price Volatility: Low

Trading Volume: High

Market Sentiments: Anxiety, Denial

Markdown (Bear Market)

This is the last stage of the market cycle. A rapid collapse in prices triggers emotional selling, panic, and capitulation dominate the market. The most distressed traders are those who still possess crypto. These traders are typically inept and inexperienced, and their investments have most probably lost value. This indicates that the bottom is near, and the market falls even faster as they panic sell. It is crucial to note that this phase, particularly near the conclusion, is the perfect opportunity to purchase cryptocurrency at the lowest available price.

Price Volatility: High

Trading Volume: High

Market Sentiments: Anger, Depression

How Long Do Market Cycles Last?

Historically, crypto market cycles tend to span approximately 24 to 36 months, often aligning with Bitcoin’s halving events, which occur roughly every four years. Fiscal and monetary policies in either the US or global markets may also have a significant impact on the duration of a market cycle. For instance, if the Federal Reserve dramatically raises (or decreases) interest rates, as it is now doing, it may prolong a negative market pattern for some time. As compared to other asset categories, the crypto market is still in its infancy. There is a scarcity of historical statistics to show the span of market cycles.

What Are The Factors Affecting the Market Cycle?

There are supply factors, such as the Bitcoin halving and burning mechanism, that can significantly affect the prices of crypto and create a new markup phase. These halvings create a supply shock by reducing the rate at which new BTC is issued—such as the April 2024 halving—which has historically preceded bull markets by six to twelve months. However, broader macroeconomic variables also influence these cycles. Actions by the Federal Reserve, shifts in inflation data, and global economic trends can either extend or shorten the duration of a market cycle. Additionally, growing institutional adoption—through vehicles like ETFs, enhanced custody infrastructure, and deeper banking integrations—has the potential to accelerate the markup phase, injecting new capital and confidence into the market.

Actionable Tips by Cycle Phase

Understanding the Crypto Market Cycle

Unlike traditional assets like stocks or bonds, crypto trading is highly volatile—market swings can happen fast, often catching traders off guard. To avoid being blindsided by downturns or trapped at market tops, it’s essential to understand the four key stages of the crypto market cycle. This knowledge helps traders make more informed decisions, anticipate shifts in sentiment, and build more resilient strategies. Market cycles follow a recognizable structure, and learning to trade in harmony with them can be the difference between reactive losses and consistent gains.

For traders navigating these cycles, Flipster offers a high-performance platform built to meet the demands of today’s market. With zero spreads on major perpetual pairs, instant order execution, and the ability to earn USDT rewards on both idle and active positions, Flipster enables you to trade smarter without compromising on speed, cost-efficiency, or capital use. Whether you're executing long-term strategies or reacting to short-term volatility, Flipster delivers a seamless and frictionless experience—giving you an edge in every phase of the cycle.

Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with a significant risk of loss due to its high price volatility, and is not suitable for all investors. Please refer to our Terms.