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What difference between a bull and a bear market in crypto?

bull and bear markets


Ever heard of the terms bull or bear market on the internet?
Those two words are frequently used in the financial and crypto world. They refer to an upward and downward market trend on the stock exchange and are notions that investors have a closer look at when they manage their investments.

Why bear and bull markets?

A good question indeed.
Why do we use the words bear and bull when referring to markets? Well, in some people’s mind, bear market gives its name to the fact that when a bear attacks its opponent, it uses its claws to bring it down, on the ground. Which directly refers to the decline of prices.
As for the bull market, it refers to a bull’s attack: the animal uses its horns to reach its opponent in an upward direction. Just like the bull market tendency does. 

Now that we have answered this simple question, let’s dive in their own definition to better understand their differences.

What is a bear market?

A bear market in crypto refers to a prolonged period of decline in the price of cryptocurrencies. During a bear market, investors’ sentiment is predominantly negative. This leads to a sustained downward trend in prices across various digital assets.  
And in such market conditions, selling pressure outweighs buying pressure, resulting in a continuous price decrease. Those bear markets show price volatility, where selling volume increases. And if sales go up, then a tendency emerges with a lack of confidence from investors, leading to further declines.
Just like a vicious circle.

Bear market periods can last for a while: from months to years.

They often coincide with broader economic downturns. Due to significant regulatory events within the cryptocurrency industry, for example.

As previous bear market periods, we could mention the cryptocurrency crash of December 2017 where Bitcoin drastically fell from $20,000 to $3,200 in just a few days. A more recent one happened in 2021 where Bitcoin mining had a social, corporate and environmental governance problem and Elon Musk accepted it and banned it subsequently from its payment method for the purchase of Tesla cars.

What is a bull market?

It won’t be a surprise: a bull market is the opposite of a bear market. It is a sustained period of rising prices and overall positive investors’ sentiment within the cryptocurrency market.

During that period of time, optimism widely spreads and buying activity increases.

Investors observe upward price movements across various digital assets.
They get more confident in general about the potential for future growth, which directly encourages further investment and speculation.

Bull markets are typically characterized by strong upward trends, reduced selling pressure, and rising trading volumes.

Certain factors can characterize these periods, such as:

  • Favourable market conditions,
  • Technological advancements,
  • Increased adoption,
  • Positive regulatory developments,
  • Or significant institutional investment.

Just as for bear markets, bull markets last for years. They often provide opportunities for investors to profit from the appreciation of asset prices.

To quote some bull run periods:

  • 2015-2017: Bitcoin price ranged from $200 in December 2015 to $670 in December 2017 due to mainstream media coverage of cryptocurrencies.
  •  2020- 2021: from September 2020 to November 2021, demands for digital payment rose and had an impact on cryptos during the COVID-19 pandemic, then was followed by the crypto winter 2022 bear market period.  

    There are lots of techniques to invest during a bull run period.

2024 crypto markets: are we entering a new bull run era?

Since the beginning of this year, Bitcoin price has tremendously increased. This could mark the entrance into the bull market with a flow of money, causing a surge in prices.

According to Glassnode, the Bitcoin market cap has increased by 141,2% since December 2023. The Ethereum market cap has increased by +79,4%.

Experienced investors know it. The fact that Ethereum does not outperform Bitcoin is a signal that there is still room for growth in large caps and Altcoins.

Certain Wall Street experts assume that the Bitcoin will reach $100,000 in 2024.

One thing remains steady: investors need to stay up to date as the crypto market seems to slightly wake up.

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