Having navigated the crypto market for years, witnessing countless price fluctuations, you will gradually realize a truth—although the surface price of a coin may change daily with new patterns, the underlying market operation logic is actually traceable.

Recently, the price movement of a certain coin serves as a textbook example of a market cycle, especially worth analyzing carefully for novice investors.

**Phase One: Emotional Collapse**

The coin price drops from 1.2U to 0.9U, with trading volume significantly shrinking. Investors fall into panic—voices of "It's over" and "Going to zero" fill the air. Retail investors sell in fear, while smart money quietly accumulates at the bottom. This process is essentially a transfer of position costs.

**Phase Two: False Rebound Trap**

Suddenly, a large bearish candle crashes the price to 0.7U, then quickly rebounds to 0.95U. When the V-shaped reversal occurs, many investors think "This must be the bottom," rushing to buy the dip. But the problem is, the price then drops below the previous low to 0.65U. The new buyers haven't reacted yet, and their accounts are already deep in loss.

**Phase Three: Concentrated Harvest**

Negative news spreads—project risks, large holders liquidating, and various rumors flying—causing the price to crash to 0.5U, with comments full of despair. But if you check on on-chain data platforms, you'll find that at this time, large addresses are frantically accumulating, indicating real funds are positioning at low levels.

**Phase Four: Price Reversal and Distribution**

When the market is utterly hopeless, the price begins to bottom out and rebound, heading toward 1U. Those who sold in panic start regretting, while new funds see the upward trend and rush to buy. Fresh capital enters, and major holders begin distributing their positions. A complete market cycle thus closes.

The essence of this process is never about who is "trapping" whom, but about the transfer and restructuring of positions among market participants. Early investors with low costs are shaken out, while latecomers with higher costs take over, reshaping the entire market participation structure.

A sharp price drop is not the end but the beginning of position consolidation and market shift. True trading experts focus not only on price movements but also on understanding the rhythm of the market cycle behind them. When you grasp the logic of market operation, even in the face of significant volatility, you can find the right response.