Understanding Crypto Market Cycles: A Practical Guide to Bull Run Preparation
The cryptocurrency market is famous for its volatility, which often feels random to the untrained observer. However, a closer look at historical patterns reveals a distinct rhythm of expansion and contraction that has repeated over time.
While no analyst can predict exact timing with certainty, understanding the signs of a shifting market is crucial for investors looking to navigate these waters effectively. Knowing how to prepare for the next crypto bull run involves recognising the subtle shifts in data and sentiment that typically precede a surge.
This article will explore the typical phases and signals that usually show before a crypto bull market, focusing on market cycles, on-chain indicators, macroeconomic factors, and investor behaviour. Let's dive in!
What Is the Crypto Market Cycle and What Are its Four Stages?
A crypto market cycle is a repeating pattern of market behaviour characterised by phases of growth and decline. These cycles are driven primarily by investor psychology—swinging between fear and greed—and significant macroeconomic factors. Historically, these cycles have aligned closely with the Bitcoin halving, an event occurring roughly every four years that reduces the issuance rate of new BTC by 50%, effectively creating a supply shock.
Understanding the cycle generally involves recognising four distinct stages:
Accumulation: This phase typically occurs after a market crash when the price has bottomed out. Prices are low and relatively stable. During this time, institutional investors and also some retail investors begin to buy quietly to build their positions, while general market sentiment remains fearful or uninterested.
Markup (Bull Market): As demand outstrips supply, sentiment shifts to optimism. Prices rise rapidly, media coverage increases, and retail investors enter the market, driven by the fear of missing out (FOMO). This is the phase where cryptocurrencies often reach new all-time highs.
Distribution: This is the peak of the cycle. Early investors and whales begin to sell their holdings to take profits, distributing their assets to latecomers. Prices fluctuate with high volatility, and sentiment becomes mixed between greed and caution.
Markdown (Bear Market): Eventually, selling pressure overwhelms demand. Prices fall significantly, and sentiment shifts drastically to fear and capitulation as the market crashes.
It is worth noting that some analysts suggest the traditional four-year cycle may be evolving or breaking down. The maturation of the market and the massive influx of institutional capital, such as through ETFs, could potentially lead to different volatility patterns, though this theory is still a subject of debate and hasn't been proven yet.
Historical Bitcoin Bull Runs
Looking at past cycles provides valuable context for how these patterns play out.
In 2013, the market experienced its first major bull run, driven by early adoption and increasing media attention. Bitcoin surged 7,592% from around $13 to over $1,000 by the end of the year.
The 2017 cycle was fueled by the retail frenzy surrounding the initial coin offering (ICO) boom. This wave of mainstream interest pushed Bitcoin from around $980 to nearly $20,000, representing a growth of 1,940%.
The 2020-2021 bull run was defined by institutional adoption from entities like Strategy (called MicroStrategy at the time) and Tesla, the growth of DeFi and NFTs, and pandemic-era monetary stimulus. During this period, Bitcoin surged 1,177% from $5,400 to approximately $69,000.
Most recently, in 2024-2025, the market witnessed a unique event where the approval of US spot Bitcoin ETFs drove BTC to new highs before the halving event for the first time in history. Fueled also by a regulatory policy shift in the US, Bitcoin's price jumped 212%—from $39,500 to as high as $123,500—between 2024 and 2025.
While history does not repeat exactly, it often rhymes. Bull runs typically last 12–18 months and consistently follow periods of quiet accumulation.
Crypto Bull Run Indicators
To gauge the health of the market, investors rely on a combination of on-chain data and technical indicators. The transparency and traceability of the blockchain allow traders to track capital flow using providers like Glassnode, CryptoQuant, Coin Metrics, CoinGlass, and Dune Analytics.
Here are also a few key metrics and indicators to watch in preparation for crypto bull runs:
MVRV Z-Score: This metric compares the market value of an asset to its realised value. It is used to spot overbought conditions (potential tops) or oversold conditions (potential bottoms).
RSI (Relative Strength Index): This measures price momentum. High levels (above 70) suggest the asset may be overbought, while low levels (below 30) suggest it may be oversold.
Bitcoin Dominance: This percentage often rises during the early stages of a bull run as investors fly to quality, and typically falls during altcoin season when risk appetite increases.
Moving Averages: Long-term trend lines, such as the 200-day or 200-week moving average, often act as critical support levels during accumulation phases.
Golden Cross: This occurs when a short-term moving average (like the 50-day) crosses above a long-term one (like the 200-day), signalling potential bullish momentum.
For a comprehensive list, CoinGlass collected the 30 top crypto bull run peak indicators.
Another vital tool is the Crypto Fear & Greed Index, which measures market sentiment on a scale of 0 to 100. A score indicating "Extreme Fear" often occurs during accumulation or markdown phases and can represent a buying opportunity. Conversely, "Extreme Greed" usually appears during markup or distribution phases, serving as a potential warning that the market is overheating.
Macroeconomic and External Factors
Technical analysis should always be combined with an understanding of the broader macroeconomic landscape. Several external factors play a significant role in shaping market cycles.
Global liquidity, often measured by the M2 money supply, is a primary driver; historically, an increase in global money supply correlates with Bitcoin price increases. Similarly, interest rates set by central banks like the Federal Reserve are crucial. Rate cuts generally favour risk-on assets like crypto, while hikes can dampen demand. Inflation is another key factor, as many investors view cryptocurrency as a hedge against fiat currency debasement.
Within the industry, the Bitcoin halving provides a predictable supply shock. Regulatory clarity, such as the approval of ETFs or stablecoin legislation, encourages institutional entry. This may lead to increased institutional adoption, where corporate treasuries and pension funds enter the space, adding stability and demand. Geopolitical stability can also drive investors toward non-sovereign assets.
Finally, technological innovation in the crypto market and exchange outflows are strong signals of accumulation and ecosystem growth.
How to Prepare for the Next Crypto Bull Run: Practical Considerations
For investors looking to navigate crypto bull runs and market cycles, preparation is key. Here are some strategies to consider:
Do your own research and never rely solely on hype or influencers. Take the time to understand a project's fundamentals and utility.
Consider dollar-cost averaging (DCA). Buying fixed amounts at regular intervals removes the stress of trying to time the market perfectly and smooths out the impact of volatility.
A golden rule of crypto is to never invest more than you can afford to lose.
Avoid putting all your capital into a single asset and build a diversified crypto portfolio instead. Consider a mix of blue-chips like BTC and ETH, other market sectors, and even stablecoins to hold capital during downturns.
Have a clear plan for when to sell. Greed can prevent investors from locking in substantial gains during the markup phase.
Ensure your assets are secure by using two-factor authentication (2FA) and hardware wallets. Be vigilant—scams and hacks tend to increase significantly during bull markets.
Avoid FOMO buying during market peaks and panic selling during dips. Sticking to a sound strategy is often more profitable than reacting to emotions.
Prepare for Crypto Bull Runs With VALR
While cryptocurrency market cycles have been historically inevitable, they offer significant opportunities for those who take the time to prepare during the quieter periods. By combining on-chain data analysis, an awareness of macro trends, and sound risk management strategies, investors can position themselves effectively for whatever the market brings next.
For those looking to prepare for the next crypto bull run, VALR offers a secure, regulated, and user-friendly platform to trade over 100 digital assets. Ready to start your journey? Create an account on VALR today!
Risk Disclosure
Trading or investing in crypto assets is risky and may result in the loss of capital as the value may fluctuate. VALR (Pty) Ltd is a licensed financial services provider (FSP #53308).
Disclaimer: Views expressed in this article are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.