Market Cycles: Understanding Bull Markets, Bear Markets, Accumulation, and Investor Psychology

Editor's note: Market Cycles is also examined in Articles 207, 218, 236. These are progressively deeper, standalone treatments of the same subject.

Encyclopedia Classification

Category: Market Psychology • Macro Structure • Cycle Analysis

Discipline: Investor Behavior • Economic Cycles • Crypto Market Phases • Long-Term Positioning

Prerequisites

• Article 174 — Wyckoff Method: The Complete Guide to Accumulation, Distribution, and Market Cycles

• Article 175 — Elliott Wave Theory: Understanding Market Psychology Through Price Cycles

• Article 172 — Liquidity: Understanding Where Money Actually Exists in the Market

Related Articles

Bitcoin Cycles • Halving Cycles • Wyckoff Method • Sentiment Analysis • Macro Economics • Risk Management

Definition

A market cycle is the recurring pattern of expansion and contraction that occurs as capital flows through financial markets.

Markets move through cycles because human behavior repeats.

The cycle is driven by:

• Fear.

• Greed.

• Confidence.

• Panic.

• Institutional positioning.

• Liquidity conditions.

• Economic conditions.

The central idea:

Markets are not random. They move through phases where psychology and capital allocation change over time.

Beginner Explanation

Markets behave like seasons.

There is:

Spring:

New growth begins.

Summer:

Growth accelerates.

Fall:

Confidence peaks.

Winter:

Decline and reset.

Financial markets experience similar seasons.

A complete cycle usually contains:

1. Accumulation

2. Expansion

3. Euphoria

4. Distribution

5. Decline

6. Capitulation

7. Reset