Market Cycles

Definition ∞ Market cycles are recurring patterns of expansion and contraction in asset prices over time. These cycles are driven by shifts in investor sentiment, economic conditions, and fundamental supply-demand dynamics. Understanding market cycles helps in anticipating potential turning points and strategic adjustments. They typically involve phases of accumulation, markup, distribution, and markdown.
Context ∞ In cryptocurrency markets, market cycles are particularly pronounced and can exhibit significant volatility. News reports frequently analyze current market conditions in relation to historical cycles, identifying potential peaks and troughs. Discussions often revolve around whether the market is in a bull phase, characterized by rising prices and optimism, or a bear phase, marked by declines and pessimism. Recognizing these cyclical patterns is fundamental to interpreting market sentiment and price action.