Economic Cycles

ALL 0-9 $A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Technical Indicators • Price Action • Chart Signals

recurring phases of expansion and contraction

Economic cycles, also known as business cycles, refer to the recurring phases of expansion and contraction in an economy over time. These cycles typically include four stages: expansion (growth), peak, contraction (recession), and trough. Understanding economic cycles helps investors, policymakers, and businesses anticipate changes in markets and make informed decisions.

Use Case: A strategic investor tracks economic cycles to rotate capital from growth assets like $ETH during expansions into defensive assets like $KAG during contractions, maximizing returns while preserving wealth across macro phases.

Key Concepts:

Opportunity Cost — Weighing potential returns against cycle-aware positioning
Expansion Phase — Period of economic growth, rising employment, and increasing asset prices
Contraction Phase — Economic downturn characterized by declining output and market corrections
Peak & Trough — Turning points that signal transitions between cycle phases
4-Year Cycle — The recurring crypto market rhythm driven by Bitcoin halving
Capital Rotation — The cyclical movement of investment capital between asset classes
Cycle Thresholds — Critical transition points between market phases
Cycle Awareness — Understanding repeating psychological and price cycles
Bitcoin Halving — Structural event that drives crypto economic cycles
Cyclical Markets — Markets that follow predictable expansion/contraction patterns

Summary: Economic cycles provide the macro framework for understanding market rhythms and capital flows. By recognizing these patterns, investors can position themselves strategically across different asset classes, timing entries and exits to align with broader economic momentum and preserve generational wealth.

Cycle Phase	Economic Indicators	Investment Strategy
Expansion	Rising GDP, low unemployment	Growth assets, crypto, equities
Peak	Maximum growth, inflation concerns	Prepare defensive rotation
Contraction	Declining GDP, rising unemployment	Hard assets, precious metals
Trough	Economic bottom, recovery signals	Accumulation opportunity

Capital Rotation Map

how capital flows through economic phases

Expansion Phase Flow
Cash → Growth Assets → Risk Assets → Crypto

Peak Rotation
Crypto → Commodities → Defensive Assets

Contraction Flow
Risk Assets → Bonds → Cash → Gold/Silver

Trough Recovery
Defensive → Value → Growth → Speculation

Current Position: Monitor cycle indicators to identify optimal rotation timing and asset allocation shifts.

The Four Phases of Economic Cycles

understanding the complete rhythm from growth to recovery

Phase	Duration	Characteristics	Crypto Behavior
Expansion	2–5 years	GDP rising, employment growing, confidence high	Bull markets, altcoin rotation, new ATHs
Peak	Months	Maximum output, inflation pressure, overheating	Blow-off tops, euphoria, distribution
Contraction	6–18 months	GDP declining, unemployment rising, pessimism	Bear markets, capitulation, flight to safety
Trough	Months	Economic bottom, recovery signals emerging	Accumulation zones, smart money loading

Economic Cycle Strategy Checklist

positioning across all four phases

Expansion Strategy

☐ Macro indicators turning positive
☐ Increase risk asset allocation
☐ Ride crypto momentum
☐ Add Layer 1s and DeFi
☐ Set exit targets early
☐ Monitor for peak signals

Peak Strategy

☐ Euphoria reaching extremes
☐ Inflation concerns rising
☐ Begin scaling out of risk
☐ Rotate to $KAG/$KAU
☐ Increase stablecoin reserves
☐ Prepare for contraction

Contraction Strategy

☐ Macro indicators negative
☐ Maximize defensive positioning
☐ Hold hard assets and cash
☐ Avoid catching falling knives
☐ Ledger for cold storage
☐ Watch for trough signals

Trough Strategy

☐ Extreme fear confirmed
☐ Smart money accumulating
☐ Begin DCA into BTC
☐ Add core positions slowly
☐ Prepare for expansion
☐ Patience as the edge

The Principle: Economic cycles are the macro heartbeat behind all markets — including crypto. Expansions create wealth; contractions preserve it; peaks demand exit discipline; troughs reward accumulation patience. Those who understand cycles don’t chase price — they position ahead of it. Rotate into growth during expansion, into hard assets like $KAG/$KAU at peaks, hold through contraction, and accumulate at troughs. The cycle always turns. Be ready when it does.

« Index