Right-Translated Market Cycle

Cryptocurrency markets often exhibit cyclical behaviour, characterised by periods of expansion (bull markets) followed by contraction (bear markets). These cycles can be influenced by various factors like market sentiment, technological developments, regulatory news, and macroeconomic trends. Cycles rarely peak at the exact midpoint or dive at the expected low. Most often, peaks occur before or after the midpoint of the cycle.

Right translation is where prices tend to peak in the latter part of the cycle during bull markets, and left translation is the tendency of prices to peak in the front half of the cycle during bear markets. In short, prices tend to peak later in bull markets and earlier in bear markets.

When prices reach a peak or near their highest point in the cycle, it often coincides with euphoria and widespread optimism amongst traders, who may sell their holdings, which leads to distribution of assets from strong hands to weak hands. This phase may involve increased trading volume as more participants enter the market.

When prices begin to decline as selling pressure outweighs buying pressure, it may be characterised by increased volatility and panic selling as traders realise the market has reached its peak. Here, the market enters a prolonged period of decline, often accompanied by pessimism, fear, and a lack of confidence amongst traders. This phase may last for an extended period as prices gradually bottom out.