Understanding Market Phases: Accumulation → Manipulation → Distribution
Smart money (large institutions) often moves the market in three main phases:
1. Accumulation
This is where institutions quietly buy assets at low prices. The market usually moves sideways, volume may slowly increase, and retail traders often lose interest.
2. Manipulation
Price temporarily moves below support or above resistance to trigger stop losses and trap traders. This creates liquidity so institutions can enter larger positions.
3. Distribution
After accumulating positions, institutions push price higher and begin selling to retail traders at higher prices. This phase often ends with strong upward momentum before a reversal.
Key Lesson:
Instead of chasing price, learn to identify these phases. Smart traders try to enter during accumulation and exit during distribution.
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