Accumulation → Expansion → Distribution → Reset
This model describes how large capital enters, grows, exits, and waits across market cycles. Whales rarely chase price. They prepare before price moves and reduce exposure before narratives flip.
Accumulation tends to happen when the market feels boring: sideways ranges, low excitement, and low attention. Smart capital accumulates quietly, often over months, when the average investor loses interest.
- Sideways price action and low volatility
- Sentiment is negative or indifferent
- Supply gets absorbed slowly
- Retail participation is minimal
Expansion begins when accumulation is largely complete and demand starts exceeding available supply. Price moves faster because supply was already absorbed earlier. Retail interest tends to rise here.
- Strong directional movement and rising volatility
- Positive narratives and growing media coverage
- Momentum attracts new buyers
Distribution is the slow exit. Whales reduce exposure into strength using retail demand as liquidity. This phase can look like "healthy consolidation" while smart capital quietly sells.
- High volume with limited progress
- Price struggles to make clean new highs
- Confidence peaks while risk increases
Reset is where conditions unwind. Capital steps aside, exposure drops, and the market searches for a new balance. This phase helps create the opportunity for the next accumulation cycle.
Retail tends to react to price and news: buying late during expansion, holding through distribution, and selling in panic during reset. Whales often do the opposite: buying when it is boring and selling when it is crowded.
- Confusing accumulation with weakness
- Assuming distribution is always "healthy consolidation"
- Believing news drives cycles more than liquidity and positioning
- Ignoring time as a strategic factor
Unit 2 Evaluation
Answer 5 random questions. Your score is saved automatically for the course certificate.