Why Most Traders Lose (And How to Win Without Day Trading)

Most people in crypto are obsessed with charts. They stare at minute by minute price action, stress over every dip, and spend their days chasing short term pumps. The result? Burnout, frustration, and, ironically, worse returns.

The truth is that you simply do not need to trade everyday to make life changing money. The biggest gains don’t come from perfect entries and exits on a five minute chart. They come from understanding the market’s long-term waves and knowing when to buy, when to hold, and when to start taking profits.

That’s where Stage Analysis comes in.

This ties back into the idea that when you “make it” in crypto, you won’t want to stare at charts all day (at least I won’t). I want to make it the easy way, maintain it the easy way, and work as little as possible.

Stage analysis isn’t about guessing what’s going to happen tomorrow. It’s about understanding where we are in the cycle and using that awareness to position yourself for maximum upside with minimal stress.

If you can master this, you won’t need to be glued to charts all day. You’ll be ahead of 99% of traders simply by recognizing what phase the market is in and acting accordingly.

What is Stage Analysis?

Stage analysis is a framework for understanding the natural cycles of markets. It helps investors identify major shifts in sentiment, price action, and opportunity, which then allows investors to enter early and exit before the hype collapses.

The concept is simple: Markets move in stages. They go through clear, repeating patterns, just like any boom and bust cycle in history.

Here’s how it typically breaks down in crypto:

1. Stage 1 – Accumulation Phase

   • The market is dead. Prices are low, interest is minimal, and retail investors have given up

   • Smart money (whales, institutions, and long-term investors) starts accumulating quietly

   • Price has found a new base/bottom formation and is bouncing around the 30 week moving average

   • 30 & 40 week moving averages are more horizontal than up and down

2. Stage 2 – Expansion (Bull Market) Phase

   • Momentum builds, prices start trending up, and early adopters begin to make profits

   • Narratives drive attention to new tech, regulation clarity, institutional adoption

   • Price is clearly above the 30 week moving average & 200 day moving average

   • 30 week moving average is clearly above 40 week moving average

3. Stage 3 – Distribution Phase

   • Euphoria hits. Prices are at all-time highs, and everyone thinks the market will never crash

   • Insiders, whales, and early investors start unloading their bags on latecomers causing volatility

   • Price starts to get more volatile with 30 week moving average and might dip below the 30 week

   • 30 week moving average can become more horizontal in nature

4. Stage 4 – Capitulation & Decline (Bear Market) Phase

   • The crash happens. Narratives shift from optimism to panic

   • The news is filled with negativity, projects collapse, regulation crackdowns increase

   • Price clearly gets rejected by 30 week moving average and trends below 30 week for longer

   • 30 week moving average is below 40 week moving average and 150 day is below 200 day

Understanding these waves lets you invest with confidence rather than chasing emotions. Instead of buying hype, you enter during accumulation in either late stage 1 or early stage 2. Instead of panicking in a crash, you recognize it as an opportunity.

How to Use Stage Analysis for Crypto Investing

Now that you know the four major stages, let’s talk about how you can actually apply this to crypto and use it to make better investment decisions.

1. Identify the Current Stage

The first step is always knowing where the market is right now. You don’t want to be buying aggressively in Stage 3 when everyone is euphoric, and you don’t want to panic-sell in Stage 4 when the market is crashing.

Questions to ask yourself:

1. Is the market in a sustained uptrend (Stage 2) or chopping sideways after a crash (Stage 1)?

2. Where is price relative to the 30 week SMA?

3. What would need to happen for this stage to turn into the next stage?

Right now (early 2025), we are likely in late Stage 2 or early Stage 3—meaning there’s still money to be made, but risks are increasing. We can see this as assets like Bitcoin start to flirt with the 30 week SMA a little more. Some assets, like Solana, might be closer to Stage 3 already, and other assets, like Cardano could be in early Stage 2.

2. Buy During Stage 1, Sell During Stage 3

The worst time to buy is when everyone is talking about crypto and prices are making new highs. The best time to buy is when no one cares. We’ve talked about this before, but how to we add stage analysis to it?

I think you have two options on when your optimal time to buy could be (and this will vary depending on how much work you want to put in day to day):

Buy During Late Stage 1: If you can identify a stage 1, and have reason to belive that the most likely scenario is up and out to stage 2, long term investors could benefit from buying in late stage 1. Buying here provides the most upside potential long term, minimizes the need for daily chart analysis, and allows ample time for DCA.

Risks of the late stage 1 buy include the fact that stage 1 could last much longer than anyone anticipates. Late stage 1 could also have many false breakouts which can wear on investor confidence leading to longer accumulation times and stagnant capital. Finally, there is always a crazy scenario where a stage 1 could turn into a stage 4 if significant negative news came through the market or your particular investment.

Buy During Stage 2: Your other option is to wait until stage 2 is confirmed before buying a crypto asset. You will lose some of the capital gains that earlier buyers made, but you will guarantee that you are in a massive uptrend and that the tide is rising fast making capital work a lot faster for your portfolio instead of being stale.

Buying during a confirmed stage 2 requires a little more consistent work because you have to monitor the charts and identify the difference between a late stage 1 breakout and a backtest verse the confirmed uptrend. If you wait, and miss the stage 2 buying opportunity, you won’t want to jump in on stage 3.

Personally, I think the majority of investors who do this on the side (like myself) for wealth creation, should focus on identifying late stage 1 breakouts that can lead to an early stage 2. This does carry the risk that capital can be stagnant or that breakouts can fall back into stage 1 for longer, but its a more passive way to approach the market.

If you did this with BTC, ADA, or SOL in their stage 1 areas before their recent run ups, you would be very happy with your newfound wealth and you wouldn’t have had the stress of timing that perfect mid-stage 2 entry.

3. Use Bitcoin as the Macro Indicator

Bitcoin sets the tone for the entire crypto market. If Bitcoin is in Stage 1, altcoins are usually in an even worse accumulation phase. If Bitcoin is entering Stage 3, altcoins could be about to have their final blow-off top in Stage 2.

We can see that BTC today is definitely somewhere in the late stage 2 early stage 3 scenario. The big thing we want to watch is what BTC price does around the 30 and 40 week moving averages and if any big catalyst show up in the market to push BTC further into a continued stage 2 rally.

4. Recognize When to Exit

This is where most people fail. They see their portfolio skyrocketing and assume it will keep going up forever. Then, when the crash comes, they ride it all the way back down.

The trick? Start exiting when euphoria peaks and stage 3 seems confirmed.

• If you buy cryptos in late stage 1, by stage 3 you will be in plenty of gains to take good profit

• You can identify stage 3 if the 30 & 40 week SMA go horizontal and price is much more volatile around these moving averages falling above and below them

• Keep an eye out for a big rejection off the 30 week SMA on higher volume because this can signal the end of stage 3

Selling doesn’t mean you have to go 100% into cash depending on your strategy. Maybe you don’t want to go back into USD and want to stay in BTC. You could use stage 3 as a time to stop the DCA and wait until stage 1 to start again.

Why This Matters for Long-Term Success

Most people fail in crypto because they get caught in short-term noise. They chase pumps, panic on dips, and never step back to see the bigger picture.

Stage analysis helps to eliminate the stress and provide a clear roadmap of where the market is going so you can invest with confidence instead of emotion.

• If you know we’re in Stage 1, you can accumulate cheap without fear.

• If we’re in Stage 2, you can ride the momentum and maximize gains.

• If we’re in Stage 3, you can take profits and protect your capital.

• If we’re in Stage 4, you can wait for the next opportunity instead of panic selling.

This is how wealth is built over multiple cycles by understanding the waves and playing the long game.

Some traders do really well with scalping, day trading, and “the grind”, but if you’d rather be on the beach while your money works for you, stage analysis could be a great tool to keep in the back of your pocket. It’s definitely in the back of mine.

Remember that different things in the market, such as massive news from government, hacks, or anything in general, can throw a stage off of its course. We sort of could see that in our market now. But on a long term basis, this should be a helpful way for you to understand market direction and quantify what assets deserve your attention at what time.

If you want to read more on stage analysis, read this blog post:

Thanks,

Dawson