Peak & Trough

Peak & Trough

Economic Cycles

Peak & Trough represent the critical turning points in economic cycles where momentum shifts direction. A peak marks the highest point of economic expansion before transitioning into contraction, while a trough represents the lowest point of economic decline before recovery begins. These inflection points are crucial for timing market entries, exits, and strategic asset allocation adjustments in both traditional and crypto markets.

Use Case: A crypto investor identifies a market peak when Bitcoin reaches new highs while economic indicators show overheating signs. They begin rotating from growth tokens into defensive positions like $RLUSD and $KAG. Conversely, at a trough, they recognize oversold conditions and start accumulating quality assets like $XRP and $ETH before the next expansion phase.

Key Concepts:

• Turning Points — Critical moments where economic momentum reverses direction.
• Economic Cycles — Peaks and troughs define the boundaries between cycle phases.
• Market Timing — Strategic positioning around these inflection points maximizes returns.
• Momentum Shifts — Capital flows change direction as cycles transition at peaks and troughs.

Summary: Peak and trough identification enables precise cycle timing and optimal capital allocation. Recognizing these turning points helps investors capture maximum upside during recoveries while protecting capital before major downturns in both crypto and traditional markets.