Market cycles refer to the repeating four-phase pattern that drives crypto price movements: accumulation (bear market bottoms), markup (bull market rally), distribution (euphoria at market tops), and markdown (crash and correction). Understanding where you are in the cycle helps determine optimal strategies for entry, exit, profit-taking, and portfolio rebalancing. Crypto cycles historically occur roughly every four years, often aligned with Bitcoin halving events, though institutional adoption may be changing this pattern.
Example:
From 2022-2025, Bitcoin moved through a complete market cycle: accumulation phase at $15,000-$25,000 in 2022-2023 while sentiment was bearish, markup phase rallying from $25,000 to $110,000 in 2024-2025, and potential distribution phase as mainstream adoption peaks. Traders who recognize they're in the distribution phase start taking profits systematically, while those who miss the signal often hold through the next markdown crash.