What Is a Bull Market?
For anyone involved in the financial markets — stock, crypto, or forex, there are a few terms used for these markets which you may have heard. The bull and bear markets are used to describe a market trend. These trends will have to be throughout the full sector of the market (not all but the majority) and must persist for a certain period of time.
The bull market, or the bull-run, is used when there is much more investing going on, as the investors have more confidence that the market is in an upward trend. At this time, most traders create a buying spree that is often metaphorically called ‘Herd.’ This can mean that the market upswing is heavy and up at least 20%. This short guide will show you everything you need to know about a crypto bull market.
What Is a Bull Market?
A ‘Bull Market’ is defined as a season where the major percentage of active traders are buying. This causes demand to outweigh supposed and, as such, market factors such as confidence, motivation etc. allures traders to spend on some particular crypto assets hoping for a price increase in the near future.
Typically, when market prices are consistently on the rise, it could be a start of a bull run, or the majority of the market participants are becoming confident. So to a large extent, a bull run reflects traders’ attitude to the market, including fear, greed, positive feedback, motivation and much more.
Examples of Crypto Bull Market
When it comes to the financial economy, the market is either bullish or bearish, and these trends can last for several years. The market’s upward trend after the 2008 financial crisis until the coronavirus pandemic is one great example of a bull run often talked about.
However, for the cryptocurrency market, it has been bullish since it was launched in 2010. At this time, bitcoin was only trading at 8 cents but reached an all-time high of $68,500 in November 2021.
In late 2017, the crypto market underwent a shocking bull run resulting in the market’s rapid growth with much speculation from nontraditional investors.
How to Benefit From the Crypto Bull Market
Since the bull market involves upward market price movements, the trading state goes pretty straightforward. Some strategies include the basic “buy and hold” and dollar cost averaging. With these tools, you can view the market as long-term gains and deposit a certain amount of money into an asset at set intervals.
The crypto bull market is highly volatile; as such, DCA prevents the risk of jumping on the trend before the market declines. With that in mind, it’s important to always do your own research before jumping into bull markets.
While the bull market presents traders with several opportunities to benefit from the market, it’s not always a good option. Sometimes some crypto prices might be at their peak, and many people don’t realize it.
When you buy cryptocurrencies when the prices have shot up, there is a risk of the price beginning to drop, especially if you bought at their peak price. As such, when the market drops, confidence disappears, and prices crash and returns back, resulting in a loss.
So, it’s always wise to analyze the crypto market fundamentally and technically before trading. Do your personal research and remember not to invest more than you can afford to lose.
Disclaimer: The opinions expressed in this blog are solely those of the writer and not of this platform.