Crypto markets can be incredibly rewarding—but also treacherously unforgiving. History has shown that the crypto bull run cycle tends to repeat every four years. Yet, even with this knowledge, many people end up losing significant amounts of money. Why? Let’s break down the reasons, layer by layer.

1. The Anatomy of a Crypto Bull Run Cycle

In general, a crypto bull run cycle spans around four years. But here’s the kicker: for most of that time, the market is in a bearish phase. Historically, the pattern looks like this:

Bear Market: Lasts roughly three years, a prolonged phase where prices slump, and hope diminishes.

Bull Run: A short but explosive period, typically lasting less than a year, where prices skyrocket and confidence runs high.

Looking at past cycles, we can see the timing:

2014-2018: Bear market - 177 weeks, Bull run - 34 weeks.

2018-2022: Bear market - 157 weeks, Bull run - 47 weeks.

Now, in the 2022-2026 cycle, we’re technically still in a bear market as a new all-time high (ATH) hasn’t been broken or sustained.

2. The Psychology Behind a Market Cycle

Market cycles aren’t just a matter of numbers; they’re also an emotional rollercoaster. Here’s how investor emotions shift through each phase of a market cycle:

🟥 The Red Phase (Fear Zone)

This phase is marked by hitting new ATHs, only for prices to begin dropping. Investors might feel:

Complacency: Believing the dip is temporary and that prices will rise again.

Anxiety and Denial: As prices continue to slide, investors may cling to hope, unable to accept the downturn.

Panic and Capitulation: When losses become unbearable, people often sell at significant losses, concluding the red phase in frustration.

🟨 The Yellow Phase (Recovery & Doubt)

This is the accumulation period, where prices trade sideways. Emotions here include:

Anger and Depression: Frustration over lost money is common, often leading to feelings of regret.

Disbelief: As the market begins to recover, investors often remain skeptical, assuming it’s a false rally.

Hope: Eventually, signs of life in the market rekindle hope, though trust is slow to build.

🟩 The Green Phase (Euphoria Zone)

The market breaks past the previous ATH, leading to exuberant rallies and high spirits:

Optimism and Belief: Confidence builds as prices rise, leading to a reinvigorated belief in the bull run.

Thrill and Euphoria: At the peak, many feel unstoppable, assuming they’ve mastered the market.

But this phase can be deceiving. Many fail to cash out at this peak, convinced the price will keep climbing. Inevitably, the cycle resets, and the euphoric gains quickly evaporate.

3. Combining Both Factors: The Hidden Trap

When you overlay the anatomy of the bull run with the psychology of each phase, a clear pattern emerges. Despite knowing the four-year cycle, emotions can cloud rational decision-making, making it easy to get trapped.

In the Red Phase, early losses lead to panic-driven decisions.

In the Yellow Phase, lingering disappointment causes hesitation, even as the market stabilizes.

In the Green Phase, euphoria blinds investors, causing them to overstay the rally.

So, why do so many lose money in crypto? Because understanding the cycle isn’t enough. It’s the emotional missteps—fueled by fear, greed, and disbelief—that pull investors into losses.

Mastering the market requires mastering emotions, not just timing the cycles. Only then can you navigate the thrilling yet treacherous world of crypto with a steady hand.