Market Cycles: Accumulation, Markup, Distribution, and Decline

Markets often move through a recurring four-phase cycle, a framework closely associated with the Wyckoff method but observed informally across many types of markets and analysis styles. Recognizing which phase a market is likely in can shape how a trader interprets price action, even without being able to predict the exact timing of a transition to the next phase.

Accumulation is the first phase, typically occurring after a decline, where informed or institutional buyers begin quietly building positions while the price moves sideways in a relatively narrow range, without yet trending clearly upward. Public sentiment during accumulation is often still negative or indifferent, following the preceding decline — the buying happens quietly precisely because it isn't yet obvious to the broader market that conditions have started to shift.

Markup is the second phase, where the price begins trending upward more visibly, drawing in more participants as the trend becomes apparent and self-reinforcing — this is typically the most recognizable "bull market" phase, where public participation and optimism build progressively as the trend extends.

Distribution is the third phase, roughly mirroring accumulation but at the top of the cycle — informed participants begin selling into continued strength while the price moves sideways again, often near its cycle high, even as public optimism (and often, buying) remains strong. Decline is the fourth and final phase, where the price begins trending downward more clearly, completing the cycle and often eventually leading into a new accumulation phase. This framework is a useful mental model for interpreting where a market might be in its broader structure, but like any market framework, it describes tendencies rather than certainties, and phases aren't always clean or easy to identify in real time.