Bitcoin Cycles and Strategies for Each Phase

Bitcoin follows historically predictable market cycles, with an average duration of 4 years, mainly influenced by halvings. Understanding these phases helps investors maximize gains and minimize losses. Each stage has an average time:

1. Accumulation: Approximately 6 to 12 months after the bear phase. During this period, prices reach lows and experienced investors start buying, preparing for the next bull cycle.

2. Bull Market: Lasts about 1.5 to 2 years. Characterized by steady price growth, with strong capital inflows into the market and widespread optimism.

3. Distribution: This phase is shorter, lasting an average of 3 to 6 months. It marks the peak of the cycle, with high volatility and profit-taking by early investors.

4. Bear Market: Lasts about 1.5 to 2 years, where prices fall consistently due to lack of demand and realization of losses. This is the most challenging time, but it also offers opportunities.

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Bear Market Strategies

During bear markets, a common approach is to seek protection against devaluation by holding capital in dollars or stablecoins such as USDT, USDC or DAI. This allows you to:

1. Capital Preservation: Avoids direct exposure to cryptocurrency volatility, protecting purchasing power.

2. Preparing for the Next Cycle: Being in dollars makes it easier to buy cryptocurrencies at lower prices during accumulation.

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Current Moment of the Cycle

We are at the beginning of the Bull Market phase, with Bitcoin set to surpass $100,000 in 2024. This milestone suggests the beginning of a period of optimism and accelerated growth, driven by factors such as the recent halving and increasing institutional adoption. However, it is essential to monitor the market closely, as volatility can bring temporary corrections.

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Conclusion

Understanding the Bitcoin cycle and aligning your strategy is crucial. In a bull market, taking profits gradually may be prudent. In a bear market, holding onto dollars or stablecoins helps you avoid losses and prepare for the next rally.

⚠️ Note: This content is for informational purposes only and does not constitute a recommendation to buy or sell. Always do your own research (DYOR) before investing.