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The Most Common Crypto Market Conditions and The Rules Around Each of Them

Which I don’t always follow, to be honest

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In my previous post, I walked through my custom market indicator and explained how it helps determine what kind of market environment we’re in.

Markets are somewhat predictable in the sense that they tend to move through recurring patterns over time. Environments repeat themselves as long as a certain set of conditions is met.

My profiler is designed to identify various market conditions.

Here are some of the most common patterns, what they usually look like, and how I think about trading them.

Some of these can be identified with the naked eye, while others require additional confirmation.

Also worth noting: multiple patterns can occur at the same time. They’re not always standalone conditions.

1. Capitulation / Euphoria

This is the market at full emotional intensity, the most extreme condition, and one that can easily be identified with the naked eye. No fancy indicator needed.

You’d know it when you see it.

Either sellers are panicking, or buyers are chasing aggressively with very little restraint. Price action tends to be fast, wide, and messy.

In this kind of environment, the best practice is usually to step back or reduce exposure. The…