Every market — crypto, forex, equities — moves in cycles. Recognising which phase you are in does not give you exact entry prices, but it gives you context, and context is what keeps trades on the right side of the move.

The four phases

• Accumulation — smart money quietly builds positions while prices drift sideways and everyone else is bored.
• Markup — the trend becomes obvious, volume rises, and followers arrive.
• Distribution — owners begin selling into strength while headlines are still bullish.
• Markdown — fear takes over, panic sells accelerate, and the cycle prepares to start again.

Sentiment is a contrarian gauge

Crowd emotion typically peaks where it should not. Extreme optimism — everyone expecting only further gains — often marks distribution. Extreme pessimism, when the asset is being written off entirely, often accompanies accumulation.

A practical habit: when you feel most confident is exactly when you should review your stops. When you feel most afraid is when the oldest opportunities are quietly forming.

Watch volume, not just price

Price tells you where the market has been; volume signals conviction. A breakout on thin volume can be a trap, while a break on heavy volume tends to persist. Combine the two reading — cycle position plus participation — and your entries improve noticeably.