When the crypto market enters a downtrend (bear market), usually everyone gets worried. However, there are several signs that can anticipate the appearance of the downtrend. And contrary to what one might think, these signs are not known only to professionals. In fact, anyone who wants to get into the cryptocurrency market should know about them. That said, they are not so easy to recognize.
The phase of denial and acceptance
Right off the bat, let’s be honest: unless you’re a professional with many years of experience interpreting charts, it can be difficult to see a downtrend coming in the crypto market. Difficult, but not impossible though! In fact, if it is difficult to anticipate a crisis on the market, it is above all because there is no no sign which indicates that the decline will begin on such date. Therefore, when the decline nevertheless occurs, a denial takes place among investors.
The denial phase is characterized by the realization of relatively irregular movements an important clue: the fear and greed. Generally, in times of crisis, this indicator shows significant peaks, but they are always short-lived. Indeed, regular corrections are made.
When the denial finally passes, acceptance take place. During this period, the price spikes become fewer, less sudden and more spaced out. At the same time, the crypto market is becoming less attractive for investors. Also, cryptocurrencies begin to lose their value. In these circumstances, there is no doubt: we are indeed entering a bearish period.
Another sign helps to recognize a downtrend. It concerns the violent crash of a project which nevertheless seemed to have a bright future. This was the case of Terra (USDT) for example. Such a crash is accompanied by the collapse of the market as a whole.
Accumulation and awakening
After denial and then acceptance, the next stage is that of accumulation. When the index fear and greed is weak and the cryptocurrency price has bottomed out, only the most stubborn investors continue to carry out actions on the market. This situation creates new opportunities to allow the digital asset concerned to take off again.
During the period of accumulation, everything seems calm in the market. But in reality, this is far from the case. Indeed, it is during this stage that developers create new products to breathe new life into the market.
The final stage of a bear market is the wake-up stage. It marks the beginning of a new cycle which starts with a positive rally. During this phase, developer projects gain popularity and cryptocurrencies once again become the most popular topics of discussion on the web.
Whether at the beginning or at the end of a bear market, there are certain signs that leave no room for doubt. They are obvious and allow to anticipate the downtrend. Fortunately, you don’t always have to be a professional to understand them.
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