To begin with, Bear and Bull markets have nothing to do with bear fur or bull meat. With that taken care of, let’s start with the definitions first.
Bear Market: Markets experiencing sustained or substantial declines are called bear markets.
Bull Market: Markets experiencing sustained or substantial growth are called bull markets.
If you’re new to the crypto world, you must know what the Bear and Bull Markets are because these two terminologies will help you make better decisions when investing your money.
Note: These terms are also used in real estate and stocks.
As always, before making any investments in crypto, make sure you do your research because cryptocurrency has its own risks and is extremely volatile. Speaking of volatility, the crypto market often experiences price fluctuations so bad it looks crazy. However, that’s something seasoned crypto investors are used to, but that’s one aspect you should keep in mind before investing.
Looking at the trends over a longer period, you’ll see the marks of bear and bull markets. So…
What Actually Is a Bull Market?
Now let’s break down the Bull market in detail. A bull market or bull run is known as the period of time when the majority of investors are buying. Due to increased buying, demand eventually outweighs supply, thus leading to high market confidence, which is why prices rise high at this time. If a certain cryptocurrency price is rising, this could be a sign that investors are very optimistic or Bullish about the coin’s performance in the future, and that is when you see a Bull Market.
Investors who think that the prices will increase over time are called Bulls. As soon as investor confidence rises, a positive loop emerges, which eventually leads to more and more investments causing the prices to skyrocket.
Does A Bull Market End?
It is completely normal to say that there will be fluctuations, dips, and even corrections during a bull. Usually, people misinterpret after looking at a short-term downward movement and consider it as the end of a bull market, but that’s not what a bearish trend is. This is why the statistics should be seen from a broader perspective, such as looking at the price over longer time frames.
Sadly, every beginning has an ending, and so goes the bull market too. At some point, investors start losing confidence, which is when the decline starts. A decline in confidence could be due to many reasons, such as high inflation rates or maybe an unforeseen outbreak, such as the COVID-19 pandemic. A sharp downward slope in the prices can begin a Bear Market, where prices tend to fall, and investors look forward to selling.
What is the Bear Market?
A Bear market or bear run is a time when supply is greater than the demand, prices fall, and investors lose confidence. The investors who believe the prices will fall are referred to as Bears. Bear markets are really difficult to trade in, especially for inexperienced traders.
It is really difficult to predict the end of a bear market and when the bottom price is reached. However, the end of a bear market can be predicted through some external factors such as economic growth, investor psychology, and world news.
However, risks can always open up gates to new heights. Buying during a bear market can prove to be fruitful as the risk could pay off when the cycle reverses itself. Investors with short-term strategies can also be looking for price spikes, and they tend to sell.
Note: People who are new to the crypto market should not invest in bear markets as there are higher risks involved unless you are rich enough to lose your investment and not cry over it.
So that was a basic overview of a bear vs. bull market. If you need more in-depth knowledge on the topic, just let me know, and I’ll help you navigate your way to better understand the crypto market.
Till then, here are Best iOS Cryptocurrency Apps for iPhone and iPad you should use to track your crypto investment!