A bull market excites people, while a bear market awakens them. Most people tend to chase at highs and cut losses at lows. To survive through a complete cycle, you must see the rhythm clearly.
The complete cycle from a bull market to a bear market consists of several stages:
1. Early Bull Market Accumulation Stage
The market has just started to warm up, prices are slowly rising, and trading volume is increasing.
Investor confidence gradually recovers, institutions and smart money begin to build positions.
At this time, opportunities are relatively stable and suitable for layout.
2. Mid Bull Market Accelerating Upward Stage
Prices rise significantly, the market atmosphere is active, and retail investors begin to enter the market en masse.
News and social media heat up, and FOMO sentiment intensifies.
Investors are generally optimistic, with fundamentals and technicals often pushing in both directions.
3. Late Bull Market Frenzy Stage
Prices soar, new highs appear frequently, and market sentiment is extremely optimistic, even frenzied.
Valuations detach from reality, bubbles are obvious, but most people are unwilling to leave the market.
High leverage and speculative trading increase, accumulating risks.
4. Top Stage Volatility and Divergence
Prices begin to fluctuate, repeatedly testing highs, and the upward momentum slows.
Institutions take profits, and some investors start to realize gains.
Market confidence shows divergence, and wait-and-see sentiment intensifies.
5. Early Bear Market Downward Start
Prices break through key support and begin to accelerate downward.
Panic sentiment spreads, and capital outflow accelerates.
Trading volume increases, and market volatility is severe.
6. Mid Bear Market Deep Adjustment
Prices fall sharply, and trading volume continues to shrink or fluctuate violently.
Investor sentiment is extremely pessimistic, leading to panic selling.
Negative news is frequent, and market liquidity worsens.
7. Late Bear Market Bottom Building Stage
Prices drop to low levels and begin to consolidate sideways.
The market is extremely sluggish, retail investor confidence is lost, and most investors exit.
Value investors and institutions begin to quietly accumulate positions.
8. End of Bear Market Turning Rebound
Prices gradually stabilize and rise, and trading volume begins to increase.
Sentiment gradually recovers, and the market begins to gather momentum for a new bull market.
This is often the best time to enter the market, as a new bull market cycle is about to begin.
Markets are born in despair, rise in hesitation, and end in frenzy.
The transition between bull and bear markets is the norm; those who can traverse the cycle are the winners.
Learning to identify stages is more important than chasing highs and cutting losses. Currently, the market is developing towards the top stage of volatility and divergence in this round of bull market.
