Traders worldwide monitor the state of the crypto market through charts and look for indicators for the next best opportunity to sell or buy. The process of understanding market trends is complex and usually leads to different interpretations considering different variables. Though countless theories are applied, there will always be two simple concepts that are universally understood and act as the basis for all indicators, namely bull and bear.
Words ‘bull’ and ‘bear’ are thrown around the most among crypto traders when discussing the state of the market. Each of them refers to the direction of the price rate trends. Their descriptions are indisputable because they are easy to observe. If you’re new to trading, be it crypto, stocks, or securities, then you will find yourself asking ‘what do bears and bulls have to do with prices?’ Here’s what you need to know about these terminologies:
The market is referred to as ‘bullish’ or a ‘bull market’ if the prices are trending upwards. This counts all the times that the crypto is sold at a lower rate, dropping the market rate temporarily. As long as the closing prices on the market show that resistances are developing upwards, then it counts as a bullish/bull market. It’s the perfect opportunity for traders to sell for profit, as well as for Bitcoin live casino gamblers to cash in their winnings.
Another use for the word ‘bull’ is referring to the trader who bought the dip in anticipation of a reversal. They are then called a ‘bull investor’ which is not an official title unless the person plans on practising the same strategy consistently. The bull market is what everyone desires for cryptocurrencies. For a time, Bitcoin (BTC) and Ethereum (ETH), two of the top assets in the crypto market, experienced this until they reached an all-time high in November 2021.
The most universally agreed upon reason why this is called a bull market is because of how the animal it’s named after attacks. Bulls lower their head in anticipation to strike. When the opportunity arises or when the target is close, he lunges with an upward swipe of its horn. It’s a great analogy for traders anticipating the upward market trend.
The bear market is the opposite of the bull market. It’s the observation that prices are going down continuously or abruptly with big losses. It counts all the closing prices that ended at a lower rate than the previous one with risks of creating a new floor. It can be further identified as either a crash or a dip based on several nuances:
A crash is a sudden drop in prices. Although short, the margin it created can cause panic among investors of the crypto. A dip, on the other hand, is a sustained downward trend, usually following a long-term bull market with chances of reversing near the price floor.
Crashes usually happen because of overselling, causing the supply to outgrow the demand. Dips happen when demands are already met and the market is waiting for the next reason to buy more assets. Reversal tends to happen because even first time traders buy crypto when the prices are low or because the market created new demands for the asset.
Among the most popular cases of either is when online gambling became popular. Gamblers buy the dip to use cheap Bitcoin at Bitcasino slots and sell the winnings at a later date. Bitcasino bonus offerings also helped promote this practice because of the match deposit scale with the size of the funds. Thus, the more crypto you send, the more free bets you get and this is easier when Bitcoin prices are low.
The downward trend is called a ‘bear market’ because of how the creature it’s named after fights in an opposite fashion to the bull. While bulls lower their head to strike upwards, a bear stands tall then swipes or slams its upper body down its prey. It works as an analogy for crypto prices because a downward trend comes only when the asset’s economy is strong.
The crypto market is affected by a lot of factors and market trends are simply the result of their collective influences. Understanding what they are and how they affect the market can give you insights in properly evaluating market trends. You can find indicators more efficiently and successfully predict the crypto market’s direction.
Here are some of those factors which all traders keep an eye on:
The value of every crypto in a day can change in a range between cents to hundreds. This is usually based on how much people are selling and buying the asset. Individuals’ decisions affect other traders because they have to compete with other traders to get profit. Thus, pricing crypto is like bidding for both sides. A seller would want to trade with a buyer who’s willing to pay higher than other buyers while they want to look for sellers who are willing to sell the crypto at the cheapest rate. This continues until the trade volume is large enough to influence the entire economy.
Whether the market trends appear as either bull or bear can also depend on how far into the past you are willing to look into. If you are to glance at Bitcoin’s price since release, then the chart would look like it’s in an eternal bull market. Limit that scope to a month or year (preferably a year) then you’ll have a clearer view of its direction.
Companies and corporations have huge influences on the crypto market because they also participate in its economy. Likewise, traders need a primary source of income and being an employee is one of the best ways to secure that. Therefore, productivity in the workforce has a positive impact on the crypto market.
The strength of the economy is measured by its diversity of income sources and interdependent actors. In the case of cryptocurrencies, digital assets are borderless, giving it one of the most accessible economic networks of all kinds of assets. There’s also the variety of crypto available in all exchanges, each with its own uses in the blockchain-based economy.
Volatility of cryptocurrencies makes them amazing long-term stores of value. It can reach high gains within a year and new all-time highs in a decade. However, its volatile nature is what makes it a challenging asset to predict in a short-term, thus the constant reversals between bull and bear trends.
One influential person’s post on social media is sometimes enough to get a discussion going, causing a direct effect on crypto market trends. This is a double-edged sword because the criticism that caused a bear market can just as likely be reversed by a promotion to cause a bull trend.
When we’re in a bull market, investors are feeling optimistic, and the economy is usually doing well. This positive atmosphere often drives stock prices up, giving investors plenty of chances to make a profit. Those who jump in early during a bull trend and hold onto their investments can enjoy consistent capital gains. As prices rise, dividends might also go up, providing another nice income stream.
On the flip side, a bear market can be a real challenge for making profits. Prices are typically on the decline, and the economic uncertainty can make investors more cautious. Still, savvy investors can uncover opportunities by using strategies like short selling, investing in inverse ETFs, or focusing on defensive stocks that tend to maintain their value. Thriving in a bear market often calls for a more strategic mindset and a higher risk tolerance.
No matter the market conditions, sticking to disciplined investing and having a solid strategy can help investors safeguard their assets and possibly discover profit opportunities, no matter the economic climate.
Crypto bull markets don’t follow a fixed schedule, but historically, they tend to occur in cycles roughly every 3 to 4 years. These cycles are often influenced by:
1. Bitcoin Halving Events – Approximately every four years, the Bitcoin network undergoes a "halving," which reduces the rate at which new bitcoins are created. This event historically has preceded major bull markets in the broader crypto space.
2. Market Sentiment – Bull markets can also follow periods of innovation, adoption growth, or positive regulatory developments that boost investor confidence.
3. Macroeconomic Factors – Low interest rates, increased institutional interest, or inflation concerns can also prompt surges in crypto prices.
While past trends suggest a 3-4 year cycle, it's important to remember that markets are unpredictable, and timing future bull markets is never guaranteed.
How long do crypto bull markets usually last? Well, it can really vary, but if we look at history, major bull markets have typically lasted anywhere from a few months to over a year. For instance, the bull market in 2013 went on for about 10 to 12 months, while the one in 2017 lasted around 12 to 13 months. The bull market from 2020 to 2021 was even longer, clocking in at about 18 months. Keep in mind, these timeframes aren’t set in stone and can be influenced by a bunch of factors like market sentiment, economic trends, regulatory changes, and new tech developments in the crypto world. Usually, bull markets wrap up with some sharp corrections or a prolonged bear market. And remember, It's important to note that past performance is not a guarantee of future trends.
It’s generally discouraged to buy cryptocurrencies on a bullish market because it’s either bound to crash soon or because the profit you’re likely to gain is minimal. The best time to buy in an upward trend is when you’re near the time of the reversal. Buy as much crypto as you wish when the price is at its lowest, usually near the price floor, then sell when it’s nearing the ceiling.
There are still benefits to buying during a bull market and that’s to influence the growth of the asset you are investing in. If you have a lot of funds, then you can nudge the prices a bit higher by buying above the selling price. It strengthens the asset’s economy, thus giving other investors confidence in the crypto’s potential to reach new heights.
The bear market is not ideal for sellers but a great opportunity for buyers. Take this chance to diversify your portfolio to other assets. Doing so not only helps stabilise the crypto’s prices but also gives you other stores of value to sell during the next bull market. Having a diverse portfolio means benefiting from multiple sources of income.
Buying the dip is the safest way to ensure profit because the economy can only go up when it’s already down. Once you bought in, then you can sit back and just watch the market rise while holding onto your assets. You can occasionally multiply them by betting on Bitcasino slots and have more to sell later.
Whether the market is bullish or bearish, it’s important to keep your long-term financial goals in mind. Short-term volatility is a normal part of investing, and reacting emotionally can lead to poor decision-making. A long-term perspective often helps investors avoid impulsive actions during market swings.
Diversification can reduce risk by spreading investments across various asset classes. In bear markets, while some investments may decline, others might remain stable or even increase in value. In bull markets, diversification helps you manage overexposure to specific sectors that might become overvalued.
Bear markets can lead to economic challenges such as job losses or reduced income. An emergency fund of 3 to 6 months’ expenses can offer financial security and prevent the need to liquidate investments during market downturns.
Investing a fixed amount at regular intervals, regardless of market conditions, is called dollar-cost averaging. This strategy helps reduce the impact of volatility and avoids the need to time the market, which can be particularly difficult during uncertain times.
Market fluctuations can test your comfort with investment risk. Periodically reassessing your risk tolerance ensures your portfolio aligns with your ability and willingness to handle potential losses, especially during bear phases.
Professional financial advisors can offer personalized guidance tailored to your financial circumstances and goals. They can help you devise strategies for both bull and bear markets to maintain growth while managing risk effectively.
Bull and bear markets are market trends that take turns for all kinds of assets. Whether their reversals are fast or slow depends on how you wish to view the crypto trading chart. Long-term investors tend to set the table for months while quick traders minimise it to a week. Both approaches to viewing the crypto market are valid and use varying theories to find patterns. If you want to benefit from both bull and bear markets, then you should learn how to look for crypto chart indicators to predict the next reversal.
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