What is the accumulation phase associated with?

The accumulation phase is characterized by low prices where cautious investors begin to build positions. This phase typically follows a bearish market trend and is marked by a sentiment of uncertainty among market participants. During this time, informed investors or institutions recognize value in the stock or asset, believing that the price will rise in the future. They incrementally buy shares, often without attracting much attention from the broader market, which can contribute to gradually stabilizing or increasing prices.

Investors are generally cautious during this phase, as they are likely aware of the risks involved after a downturn but still see potential for future gains. The accumulation phase is pivotal because it sets the groundwork for a potential upward movement in prices as more participants eventually enter the market, leading to a more significant upward price trend known as the markup phase.