Crypto Markets and the Four-Year Cycle: Why So Many Still Lose

Crypto markets, like clockwork, run on a four-year cycle, with predictable surges and prolonged bear markets. Yet, despite this well-known pattern, many investors find themselves trapped in cycles of excitement and despair, leading to substantial losses. Let’s break down why this happens and how understanding market psychology can make a difference.

### 1. Understanding the Four-Year Crypto Cycle

Each crypto cycle seems to follow a similar rhythm: a prolonged bear market followed by a brief but explosive bull run. Here's how these cycles have looked in the past:

2014-2018 Cycle:

- Bear Market: 177 weeks

- Bull Run: 34 weeks

- Total: 211 weeks (4 years and 2 weeks)

2018-2022 Cycle:

- Bear Market: 157 weeks

- Bull Run: 47 weeks

- Total: 204 weeks (3 years, 11 months)

2022-2026 Cycle:

- Currently, we're in bear territory, awaiting the next bull run to reach a new all-time high.

Despite the regularity, many investors struggle to benefit from these cycles due to emotional and psychological barriers.

### 2. The Emotional Phases of a Market Cycle

Crypto investing isn't just about numbers—it's an emotional roller coaster. Each phase of the market brings unique psychological challenges that can cloud even the best strategies.

#### The Red Phase: ATH Hangover

After a euphoric all-time high (ATH), prices start to drop, but many assume it's a minor pullback. As the decline deepens, anxiety turns to panic, and the hope of a quick recovery fades. Eventually, many sell at a substantial loss, often at rock bottom—this is the painful moment of capitulation, a common experience for new investors.

#### The Yellow Phase: Recovery and Reluctance

In this phase, prices stabilize, but the trauma of the last crash lingers. Early rallies may occur, but investors often remain cautious, fearful of getting burned again. As prices finally begin a real ascent, hope returns, but hesitation often leads to missed gains.

#### The Green Phase: Euphoria Returns

Prices break past previous highs, and excitement takes over. Investors pile back in, confident and enthusiastic. Yet, without a disciplined exit strategy, many get swept up in the euphoria, leaving them vulnerable to the next inevitable downturn.

### 3. The Cycle Trap: When Market Cycles Meet Emotional Cycles

The interplay between market cycles and emotions is where most investors lose out. Despite understanding the overall market rhythm, emotional reactions—fear, hope, greed—can overshadow logical planning. This often leads to poor timing and reactionary decisions:

- Red Phase: Feeling invincible after the ATH, you hold as prices drop, leading to panic-selling.

- Yellow Phase: Anger and regret prevent you from re-entering when prices stabilize.

- Green Phase: Euphoria blinds you to the risk of the next downturn, catching you off-guard.

### The Real Key to Winning in Crypto

Ultimately, crypto investing requires more than just knowing the cycle; it demands a clear plan and emotional discipline. To succeed, avoid getting caught up in the cycle’s highs and lows. Set entry and exit points, manage risk, and stay focused on your strategy—this is the difference between wealth-building and heartbreak in the crypto market.