Welcome to Kafycrypto, your number one crypto news, and marketing channel. This article is about the bear market and bull run in crypto.
In this article, we’ll cover everything about the bull market. We’ll learn what is is and speculate on how long it lasts. We’ll also talk about how often they occur and how to take advantage of them as an investor.
What is a bull Run in Crypto?
In crypto trading, a bull run is a period of notable and continued rise in the market price of Bitcoin. This rise in price tends to extend to most other tokens. A bull market is an event in crypto trading when the price of a crypto token rises over a sustained period. It is an upward trend in the price of a security or crypto token.
It is a time in the market when most investors believe the price of a particular token is rising. Thus, they tend to invest much in that token. The bull run exhibits optimism among traders. During a bull run, there appears to be a lot of good news about the token. The excitement leads to an increase in demand for the token. And this demand exceeds supply.
Negative news usually has minimal effect on the rising price during a bull run. Bulls are investors who keep buying into the market in spite of negative media. Bullish is the term used in describing this kind of mindset or sentiment. This description derives from a bull’s tendency to hack the opponent up with its horn.
A bull run begins at the end of a bear market. It is usually identified after the market has moved up 20% into the previous bear market. A bull run can last from 6 months to several years. The length depends on how long the bulls stay confident and the bears remain wary of the market. The end of a bull run signals the commencement of a bear market.
Now let’s learn about the bear market.
What is A Bear Market?
A bear market is when the price of a cryptocurrency is falling. It’s when everything that was once worth $1 could be worth only a few cents. A bear market occurs when there’s a downward movement in crypto market prices.
Bear markets can last for months or even years. But like the rest of life, they are never permanent. Things get better again as more people resume buying cryptocurrencies. And due to new developments in technology or new found uses, the bulls return.
What to do During A Bull Run in Crypto?
A cryptocurrency is in a bull market when its price rises fast within a short period. The price of the crypto may rise due to increased demand and its listing on exchanges. It could also be because of positive news about that particular coin.
We can cite a good example of this from Bitcoin (BTC) in late 2017 and early 2018. It experienced a supersonic rise from $1k at the beginning of the year to over $20k in December 2017. And then fell a little again. Many people believed that BTC would continue rising in value even further. This led to astronomic investments in bitcoin as demand soared.
You can invest in a bull run by buying and holding till the market hits a price that pleases you to sell. You can also add to your position at every retracement during the trend. Note that buying in a bull run helps to sustain the trend and maximize your profit.
What to do in A Bear Market?
A bear market is a time when the price of a cryptocurrency falls. This can last for months or years, depending on how long it is that you invest in cryptocurrencies. The bear market is a reverse of the bull market. This translates that there may be more supply than demand for the token. Folks just don’t care to buy it.
In crypto trading, it is advisable to buy during bear markets. As there’s almost a certainty that the bull will return. You can also choose to sell at bullish retracements. Such trend reversal trading could help recoup small profits along the fall.
Dollar cost averaging is a strategy that works for both bull and bear markets. The dollar cost averaging strategy helps manage volatility. Thus, it is popular among crypto investors and traders.
Another strategy that works for most folks is investing in stablecoins. A stablecoin is a cryptocurrency kept at same price as a stable no-crypto asset. For example, USDT or Tether maintains the same price as the US Dollar. Other notable stablecoins include the USD coin (USDC) and Binance USD (BUSD).
We will not exhaust trading strategies here in this post. But you can check out more strategies for investing in Defi in this blogpost. Feel free to copy the strategy to begin making profits in the current markets.
What is the Duration of A Bear Market Or A Bull Run In Crypto?
Many factors can affect the length of a bull or bear trend. The most important factor is the cryptocurrency itself. The success of the token can determine how long the market lasts. When the currency is doing well and sustains a positive vibe, then the trend may last.
A trend can last for as long as five years. It could also be a brief one that spans only six months. The length of the trend is only as important as what you do while it lasts.
The future of cryptocurrency is still uncertain. Yet, blockchain technology will continue to be an important part of our lives. As a result, we should expect more companies to start using it in their products and services.
As this expansion in the adoption of crypto progresses, token values will increase. So it will not be overreaching to expecting a bull run in crypto now and then.
Bull and bear markets are a part of the cryptocurrency ecosystem. While you can’t predict them, there are some things you can do to prepare your portfolio for a downturn or an upswing. We’ve covered some of these factors in this article. And we hope it will help you make more informed decisions when investing in cryptos!