If you plan to invest in cryptocurrency, stocks, real estate, or any other asset, you have to familiarize yourself with a bull market (bull run) or a bear market. Talking simply, a bull run ( crypto bull run) or bull market is a market with rising prices, while a bear market accounts for a declining one.
This happens usually due to moment-to-moment (or day-to-day) market volatility conditions. Both terminologies stand for (i) Longer durations of downward or upward movement and (ii) Substantial (the mostly accepted figure is 20%) downward or upward swings.
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What is a crypto bull run or bull market?
A crypto bull run or a crypto bull market is a period where most of the crypto investors are buying crypto and market demand outweighs the supply chain, which leads the market towards spikes or boosts in prices.
In other words, a bull run (known as a bull trend) is a time duration in the financial market during which the prices of certain assets continue to rise. Such a quick rise in prices can be attributed to several market elements, such as demand, volatility, and market valuation, are to blame.
A bull run usually encourages the investors and enhances market confidence. If you observe prices quickly trending upwards, on a business day in the cryptocurrency space, this could be a clear indication of a crypto bull run or bull market.
It shows the optimistic approach of the majority of investors. So, the market traders become “bullish”. It potentially can further increase the price because you may be looking at the start of a bull market.
In trading an investor who thinks the prices will increase over time, is known as “bulls.” As the confidence in the trading market rises, a positive feedback loop draws in more and more crypto investments causing prices to skyrocket to the next level.
Public confidence can substantially influence an asset’s worth. It is also an indicator to determine investors’ optimism in a given market which is also termed as market sentiment.
How to determine the end of a crypto bull run or bull market?
You see fluctuations, dips, and corrections during a bull market. Inexperienced or new investors might misinterpret the short-term downward movements and believe it is the end of a crypto bull run.
So, it’s important to keep in mind any potential indicator of a market trend reversal, considering the price action over higher (longer) time frames. You must think from a broader perspective because some investors with shorter time frame experiences usually recommend investing in or buying the dip.
Historical dataset reveals that a bull run in crypto markets doesn’t last longer than a certain timespan. Ultimately, the investors lose their confidence — a piece of bad news like unfavorable legislation regarding crypto may trigger an upset in the crypto market.
A sudden fall in prices may cause a bear market where the investors think that the prices will keep falling. Traders lose confidence and try to sell their assets looking at the downward spiral to prevent further losses.
FAQs
Is the next crypto bull run coming in 2024?
Crypto investors believe that the central bank rate hikes indicate the probability for optimistic investors to look forward to a breakout bull run in 2024. The bull market will continue throughout 2024, delivering a better time for global stocks.
