The best thing about cryptocurrency exchange markets is that they have advanced tracking systems that are used to track down any ups and downs in the market. Many traders used this method to observe the prices of different currencies that allow them to make better decisions when to enter and exit from the market. Trend markets happen when the market is going either in an upward or downward direction. If there is no specific direction, it is known as a ranging market. There are two types of trends that are very much recognized in the trade markets.

• Uptrend OR Upward trend.
• Downtrend OR Downward trend.

Uptrend

Uptrend happens when whales buy huge assets that cause the prices of that currency to increase as there are high amounts of liquidity being provided to the market. It can normally be seen in the charts when a currency started moving above the average price.

^{Cardano is in an uptrend phase.}

Downtrend

Downtrend happens whales start to sell out the assets that cause the prices of the currency to decrease and as a result, we get to see the bearish market. The downward trend is always followed by an upward trend.

^{Doge just made out of a downtrend.}

Question2

Briefly explain when is the best time to buy an asset and when should you sell the asset so that you don't get in loss in a trending market

The best time to buy an asset is in the accumulation or re-accumulation phase. It's sometimes hard to read the accumulation zone, so the re-accumulation stage is also the best time to buy the assets as when the whales pause their action before that uprise in the market. You should set the exit point slightly below the entry price so that you will not face much loss in case of a false trend. The worst time to buy is during the distribution phase. Many newbie traders think that the prices will still go up so they buy assets. So, we always have to be careful and be able to differentiate between the accumulation phases and distribution phases.

^{Live chart from solana}

As you can see in the screenshot above, the best time to buy assets marked with blue circles, the cross signifies that the uptrend phase has been over and the distribution phase has been started. You should refrain from buying any more. The distribution phase is the best time to sell your assets since the prices are much high and it's time for profit.

Question3

Show and explain the different phases of the Market on Crypto Asset except: BTC, ETH, ADA and BNB. (Screenshot needed)

Because of the fact that prices of cryptocurrencies are volatile and always are in different stages, there are different phases to better understand the stage of the market so that the traders can use these techniques to know when to enter and exit from the market. The phases are listed below:

• Accumulation phase
• Re-accumulation phase
• Uptrend phase
• Distribution phase
• Downtrend phase
• Re-distribution phase

^{Image containing all the stages}

Accumulation phase

In this phase, whales start to buy assets in a small amount to attract different traders to the market. This is one of the best times to enter the market as accumulation periods are always followed by an uptrend phase. Set the exit point just below the entry-level in case of a false alarm.

^{A potential accumulation zone on sfp}

Re-accumulation phase

After the accumulation phase, we often see a little uptrend in the market. After that, the re-accumulation zone starts, this is also one of the best times to enter the market as we get to see another uptrend in the market. The prices reach the peak as there is more liquidity being provided to the market.

^{sfp just passed it's reaccumulation zone}

Uptrend phase

This phase mostly happens in two parts, one just after the accumulation zone, and the other after the re-accumulation zone. This is the time when whales start to buy assets in huge amounts.

Distribution phase

After the uptrend phase, this phase occurs in which whales start to sell their assets at a much higher price. This is the worst time to buy assets as a downtrend phase happens after the distribution phase. It's the best time to sell your assets as the prices are high at that time, and your investment has most probably made a certain amount of profit if you bought the assets in accumulation zones.

^{Distribution phase in Polkadot}

Downtrend phase

This is the time when whales will cause the market to go to the bearish trend. Whales start to sell all their assets causing the market to go down quickly.

Re-distribution phase

This phase can happen during a downtrend. Many traders also make the mistake of buying assets as they thought the prices will again go up.

^{Re-distribution phase}

Question4

demonstrate how will you use the phases of the market to your advantage. Where will you buy the asset and where will you take profits?

The accumulation zone is the best time to buy assets as it's the starting time of the uptrend. If by any chance, I lose the opportunity to buy the assets in the accumulation zone, I can always buy them at the re-accumulation zone, these two are the best times to buy the assets as the currencies are expected to see an uptrend after these accumulation periods.

Now, the best time to sell the assets is in the distribution zone. As the prices are at a peak, and the traders who bought them in the accumulation zone have certainly made profits. This is the best time to exit the market.

Question5

Conclusion

This lecture has certainly taught me a lot of things about the crypto markets. I learned that you always have to make the decision based on the trends of the market. The best tactic is to look at the charts and see where can be your entry and exit point. We should always make a backup plan to stop and exit the market before any critical loss if there's a false trend. Do not let yourself get into the trap of FOMO, make your decision based on the condition of the market and not by looking at other traders. I also learned one thing that, do not invest your whole financial earning, the loss can be critical.