The 4 Major Stages of Institutional Intervention in Cryptocurrencies: A Practical Breakdown from Accumulation to Distribution
1. Accumulation Stage: The Institutional "Quietly Hoarding Coins" Period The core action of institutional funds during this stage is to collect chips at low prices; at this time, institutions are the main buyers, while retail investors are mostly sellers. From the characteristics of the market, this can be judged through the relationship between volume and price: when cryptocurrency prices are in a low range, there will be stair-step volume increases (trading volume gradually increasing), accumulation (continuous large transactions), and simultaneous rise of volume and price (prices rising along with trading volume), which correspond directly to the chip distribution map, reflecting that institutions are steadily accumulating.
2. Rising Stage: The Institutional "Pushing Up Coin Prices" Profit-Taking Period After institutions complete accumulation, the price of cryptocurrencies will break away from their cost zone, and institutions will begin to realize paper profits. During this stage, institutions will use a small amount of funds for a washout (oscillation consolidation, cleaning up retail investors' floating chips), while the majority of chips remain unchanged; according to the chip distribution map, a large amount of chips still occupies the bottom area, which is the core holding of institutions, aiming to wait for subsequent high-level cashing out, pushing the coin prices further up.
3. Peak Stage: The Institutional "Preparing to Exit" Signal Period When the price of cryptocurrencies is at a high level, if the chips in the bottom area suddenly disappear in large quantities, it is a clear sign of institutional selling. The key characteristics of this stage are: low-position chips continuously moving to high positions, forming a dense accumulation at high positions, while the market turnover rate sharply increases (a large number of chips changing hands at high positions), indicating that institutions are accelerating the transfer of chips, and coin prices are about to peak.
4. Distribution Stage: The Institutional "Cashing Out and Exiting" Final Period After institutions complete profit-taking at high cryptocurrency prices, market chips will be fully concentrated in the high range, and there will be no institutional holding chips at the bottom. At this time, the institutional selling action has been completed, and the subsequent lack of upward momentum for cryptocurrencies means investors should not continue to hold and must immediately take stop-loss or profit-taking actions to avoid being trapped.
