In most case scenarios, especially when related to Investment, the terms Bull and Bear market is usually associated in describing market conditions. In such cases, the Bull market will be used to state an appreciation in market value while the Bear market is linked to depreciation in the market value.
Despite the differences in both market conditions, it is certain that each has a season, a time comes where a certain market condition lasts a good while and must be expected by all investors. These terms span across the ForEx markets and the Cryptocurrency markets, usually influenced by the economical situation surrounding the season.
In this Article, the definition of these terms will be explained, the differences and possible causes of the market conditions will also be discussed.
Definition of The Bull and Bear Markets
The term 'Bull market' is usually associated with longer period of price growth in stocks or cryptocurrency. A very recent and popular one in the cryptocurrency market can be linked to the 2017 Bitcoin Bull market which saw the spike in Bitcoin price from $900 to $20,000.
In other words, the term 'Bear Market' is a direct opposite of the Bull Market. This is usually associated with sustained and declining growth in the prices of stocks or cryptocurrency.
During the Bull Market or Bull run as it is likely called, majority of investors are buying, demand outweighs supply, market confidence is high, prices are rising creating bullish patterns for technical analysis. This usually blows up when the confidence is poked resulting from either negative economical occurrences or huge sell offs by top investors called whales there by leading to the Bear Market.
How To Ascertain the End of A Bull Market and The Beginning of A Bear Market
A lot of speculations usually arise when there is excessive Buys into the bull market to when sell offs will begin. Even during a bull market there is usually some occurrences of market fluctuations, dips, and corrections along the way. This might result in the misinterpretation of short-term downward movements as the end of a bull market.
Following past occurrences, History has made Investors believe that the Bull markets likewise the Bear market do not last forever and this past occurrences and patterns created grounds for technical analysis. With this the Ability to perform technical analysis, the Bull market or the Bear market can be predicted prior to it's occurrence.
A sharp downwards price movement can begin a bear market, where more and more investors believe prices will continue to fall and that creates fear amongst other investors which may cause a downward spiral as they sell in order to prevent further losses.
Despite the differences between these two market seasons in cryptocurrency, Investors can like take advantage of the differences and still make profits from them.
How To Take Advantage of Both The Bear And Bull Markets
First and foremost, one must be able to ascertain which session of the market is coming to play ahead before being able to take advantage of it.
For traders, going long during a bull market can fetch enough bucks likewise going short when the sense of a bear market is felt. This can only be determined by a proper practice of technical and fundamental analysis to avoid making a wrong option.
During a bear market, Investors are mostly advised to buy the Dip and go short in their positions. This means accumulating more assets, taking advantage of the price decline and making profits as the price continues to go down respectively.
On the other Hand, Since the Bull market usually come to play after the Bear market, Investors can make profits by longing their positions and selling as the price of the asset plunges.
In a simpler term, just buy during the Bear market, it accumulates profits when the Bull market comes, that way you sell off with huge gains.
It is usually expected of any investor to make personal research before investing into any asset. This article is not a financial Advise as you are liable to any result you get from your actions.
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