What is Accumulation in Cryptocurrencies?-banner-imageAcademy

What is Accumulation in Cryptocurrencies?

Investments made to exceed the average income level have diversified over the years. As the adoption of the cryptocurrency ecosystem has increased, investors have started adding more and more cryptocurrencies to their portfolios. Despite the ossified structure of traditional financial markets, the number of investors in the crypto money ecosystem, which is built on the unique opportunities offered by blockchain technology, is increasing day by day. On the other hand, there are various strategies developed for investors in the ecosystem to be less affected by the volatility of crypto assets. In this article, we will talk about the accumulation of cryptocurrencies.

Accumulation is a phase that happens in every market cycle. Accumulation begins after the end of the previous cycle, when sellers exit the market and prices are perceived to be starting to stabilize. At this stage, volumes are below average as investors have little interest in the markets. Therefore, no clear trend emerges and assets are often traded in a narrow range. In the accumulation phase; Market sentiment is dominated by insecurity and uncertainty. Volatility and trading volumes are low. The accumulation phase is also known as the consolidation phase, which marks the end of the downtrend. Investors may hesitate to enter the market because it is not known exactly when an asset has the lowest possible price. But from another perspective, long-term investors often view the accumulation phase as a harbinger of the market's uptrend.

As we mentioned, accumulation periods attract more attention of long-term investors. But for short-term investors, it is very important to know that the accumulation phase can take weeks, months or even years. At this point, positive news about market conditions in general may attract the attention of investors and the market cycle may leave the accumulation stage and move on to the next stage. Accumulation is the first of the 4 phases of the crypto market. Other stages; price increase phase, recovery and price decrease phases.