When it comes to cryptocurrency and the stock market, there are two movements to consider, and that is the upward trend or the downward trend. With this, individuals and experts came to a term that can be incorporated into these movements; it is what they call the bull and bear market. Uncontrollably both bull and bear market is part of the cryptocurrency market lifecycle; for better or for worse, each asset should have the lows, which is the bear market and the highs, which is the bull market. A fair share of each would teach investors and traders what to expect on cryptocurrency, which can most likely help individuals handle their investment and trading decisions. The Bitcoin Pro website is an effective tool where you can be guided on trading.
These terms can generally describe how the cryptocurrency market is doing in general, especially in its value, whether it is gaining or it is declining. Being knowledgeable about this would make a huge impact on your cryptocurrency portfolio, so it is important that you know the basics of this aspect of cryptocurrency. Since cryptocurrency is still highly volatile, sometimes it is too complicated for one to observe the general movement of their investment, the asset’s value or if it is experiencing a bull market or bear market. Both of these terms came from the stock market, which is also highly applicable to the cryptocurrency market. It is also worth mentioning that the term bull market came from the bull’s fighting strategy in which it uses horns against its opponent and pulls it upward. And the bear market came from the bear’s fighting style, where it stomps its opponent in a downward motion.
What is the bull market?
In the stock market, this typically means that the economy has favourable conditions, and the market is projected to rise. Usually, this is followed by positive investor movements regarding the uptrend in the value. While in cryptocurrency, a bull market is when an asset is observed to be growing in value together with favourable economic conditions as well, which investors are optimistic about since this is a good sign in making their cryptocurrency portfolio good.
One can say a cryptocurrency is experiencing the bull market when it has at least a 40% increase in value for more than one to two days. The reason for this is that the cryptocurrency market is obviously smaller than traditional markets, hence its volatility. That is why most of the new and even old investors tend to utilise cryptocurrency trading platforms like Bitcoin Pro to be guided on how to maximise profit on both markets.
How does the bull market happen in cryptocurrency?
The bull market starts to happen when a lot of investors purchase a lot of assets or cryptocurrency, which typically makes the market value rise. When the other investors observe that the market of a certain cryptocurrency is rising, they would also feel the urge to invest and purchase. This could go on for a certain period until the price of the asset is still low, in which most investors think that they would gain more profit with it since it is experiencing an upward trend.
On the other hand, there are also other factors that could make the market be in a bull market. For example, when the gross domestic product is strong and the unemployment rate is low, these factors boost investors’ confidence. Nevertheless, this could only go on for as long as the supply is exceeding the demand; until then, it may be on a flat rate for a time then be followed by the bear market. It would be best to check out the Bitcoin Pro website before investing or trading in cryptocurrency.
What is the bear market?
Basically, the bear market is the opposite of the bull market, which means the value of an asset is on a downward trend. This usually happens after the bull market as well; once the supply has exceeded the demand, that’s where the bear market comes. The other factor for the bear market to happen in the low economy with a high unemployment rate could happen due to natural disasters, geopolitical emergencies and poor economic policies.
You can consider an asset going through a bear market when it experiences a dip of at least more than 20%. Since the prices are getting low, investors tend to sell their cryptocurrency investment or trade it in with another cryptocurrency, causing the market value and market capacity to dip continuously. With this, other investors’ perceptions about the asset would be in a downward pattern as well.
Although most of the investors would typically buy assets experiencing the bear market because obviously, you can get the asset at the lowest price possible. The catch every time you buy an asset in the bear market is that you have no idea when it will be on the bull market again, making the trade a gamble for the investors.
Bull vs Bear market
Although this does not happen every time since it would require a certain percentage for both to be said it is experiencing either bull or bear. And with cryptocurrency, trends may vary due to high volatility and fast fluctuations. Both affect the cryptocurrency market in different ways as well, just like how when a bear market is slowly surpassing the bear market, most of the time, investors would make hype on it to get it back to a sustainable value or even have it on the bull market again. That is how some traders boost their profits; usually, it tends to move quickly, causing the markets to be short-lived and only lasting for a few days to a month even.
Having that said, investors and traders can also make a profit on investing in a bull market, as this can contribute to the uptrend movement, which can also make your cryptocurrency profit get market strengths. Forecasting in an early manner about the asset’s movement would make you get the best profit and minimise losses. Nevertheless, all strategies come with a risk, so analysing the past trends your chosen asset has been and being updated on the latest trends can do something. Also, as part of investing in cryptocurrency, you will experience both the bear and bull market, and it is best to make decisions whenever you feel like the trend would go on or not.
