Talking of markets, highs and lows are a part of every market, be it crypto, stock, real estate, retail, or any other. Markets experience volatilities with every passing minute. A rise or fall in a certain trend might expect a certain market to sometimes boost or even fall to crash at times.
It’s important to understand clearly all market trends, so as to have an upper hand. That’s why today, we’ll be guiding you about the two main trends marked for markets, bull and bear markets. So, let’s start with it right away.
What’s a Bull Market?
When the market’s doing good and investors are investing in bulk, this time period is defined as a bull market or bull run. This is the time when the prices are on the rise and assets are going scarce because of the high demand, or in other words, demand outgrows the supply. These are the signs of a bull market.
In the crypto space, you must have heard of the term ‘bullish’ quite frequently. The investors become bullish when they see the prices rising in the crypto market so they start investing more because they’re being optimistic and hope for further price surges as well.
This way, confidence keeps on building. And since the confidence of the community or public is what keeps the crypto market going, the crypto trends and prices rise along with it.
It Doesn’t Stay Forever
Yup, market volatility comes in and takes away the good bull market days. Even while the prices are going up and optimism is building, fluctuations and doubts are still present. Sometimes, misinterpretation of certain trends can also lead to the end of bull markets. That’s why a sharp eye is needed to stay ahead of all the potential trend reversals over a long period of time.
Bull market doesn’t stay forever. So what basically happens is that at one point or another, the market people’s confidence starts to fade. The investors start to have pessimistic feelings about the price. This can be due to basically anything, some global situation or influences may also target the market volatility. If you see a sudden downfall in the market trends and prices, you’re actually seeing the end of the bull market and the start of a bear market.
For your better understanding, here’s an example we’d like to state. Quite a while ago, the sensational football legend Christiano Ronaldo removed the Coca-Cola bottle from the table during a press conference, and the beverage company had to suffer quite a lot due to that one act. See, that’s how delicate any market is.
What’s a Bear Market?
Prices dropping, a big and infinite supply of assets, confidence drowning, all of these are the marks of a bear market. Investors fear the price downfall, therefore stop buying further.
This happens in the crypto market quite a lot. When the crypto people start to lose confidence in prices, they stop buying anymore and rather start to sell before the market goes down further. This way, the supply becomes huge and demand is quite low. With huge demand and almost no scarcity, prices fall.
Bear markets are unpredictable as we never know when the prices will start to recover and how much time it will take to rebound because it’s usually a quite slow process and depends on potential factors including any global situation like COVID-19 or any economic situation of the specific area.
So this was all about bull and bear markets. The Crypto market is known for its volatility, so make sure you’re aware of all the market trends before investing in it. If your investment strategies are correct and long-term, you’re bound to succeed no matter what.