Cryptocurrency bull market definition, examples, and identification

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There’s a lot of terms to learn in cryptocurrency trading, but “bull run” seems to be the one people learn the fastest. That’s normally because this is the time, when crypto starts getting the most coverage in the media, yet at the same time things can get very dangerous for new crypto investors. In this article we'll find out, what it is, and share with you everything you need to know to navigate the bull market crypto cycle.


Cryptocurrency bull market definition

A bull market refers to a time period on the market cycle, when the value of crypto assets is on the rise. A past bull market drove prices so high, that it brought many new investors to the cryptocurrency niche.

Unfortunately, it also set them up for a fall, and you should beware of bull runs, where you may be unknowingly purchasing your coins or tokens at the inflated price. However, if you have purchased your assets at the attractive price previously, then a bull market gives you an excellent opportunity to claim some of that profit.


How to identify a crypto bull market

Identifying the start of a bull market can be tough, but generally, you would see a lot of optimism surrounding cryptocurrencies. The whole market would look like it was slowly rebounding and becoming very healthy, particularly after a previous sharp decline.

People will be excited about the future of crypto, when you’re on a bull market. Watch the news carefully, particularly mainstream media and see what they say about blockchain technologies. If it’s all doom and gloom, then prepare for more declines. However, if things are looking sunnier on the regular, then you could be ready to see increase in the price.


Bull market example

During the down market cycle, Jimmy wisely invested in a solid cryptocurrency project while the price was low. While he had to hang on to his investment through the ups and downs over a couple of years, soon he began to see signs of market recovery. The price of his investment continues to rise through the bull market and he makes a tidy profit by buying low and selling high.


For how long can it last

It’s hard to say how long cryptocurrency bull markets last. Their trading data is just much more limited because of how new they are still, and they are very different from traditional financial assets.

However, if we examine the previous highs and lows for bitcoin we can see, that these market cycles can last for many months or in some cases it could even be several years. Much of this depends on market sentiment. Since most assets follow Bitcoin, you should start by analyzing its previous ups and downs to familiarize yourself with crypto market cycles.


Can a bull market last forever

Markets move in cycles and no single cycle lasts forever. People who think that the bull market will last forever often lose most of their gains to greed. In any financial market, not just cryptocurrency, it’s important to know when to take your profit.

If you feel that the bull market may soon come to the end, then you should take precautions. It’s a good idea to sock some of your gains away into stable assets so that you’re in a better position when the eventual down cycle comes into play.


What kills a bull market

The exact reasons for a bull market to end could vary, but the best explanation is pessimism. Some type of a trigger, that makes investors nervous. This could include news about the cryptocurrency in general or it could even be tied to the economy itself. The only way to know, when the bull market ends, is to try to identify the signs of decline.


When is the next bull market

It’s impossible to say for sure, but investors, who are looking to identify the next crypto bull market, should spend their time looking for signs of rebound. This could include increased adoption in big ways, general optimism from investors about buying, solid support levels and upticks in the value of the market, etc. Be careful though, because it’s easier said than done to mark the bottom of the decline.


Bull and bear market difference

A bull market comes, when assets are on the rise, while a bear market represents the situation, where assets are in steady decline. These markets often follow each other, and investors, who enjoy the benefits of a bull market should be careful, because a bear market can turn up real quick and take those gains away. However, both markets have their advantages, because a bear market is often a good time to buy up quality coins and tokens at the bottom of the barrel prices.


Bull market vs bubble

A bubble happens when the value of an asset becomes overinflated. The market can’t support these figures, and soon the value of those investments starts crashing down on investors. While sometimes a cryptocurrency bull market can lead to a dangerous bubble, this is not always the case.

Investors should beware of bubbles, but confident in bull markets with solid, steady and supportable growth. Bubbles can happen in any financial market, and the results are often catastrophic. Tacking away assets in stable places is a good strategy, if you think a bubble situation is taking place.


What is a bull trap in crypto trading

A bull trap is a false trading indicator. Cryptocurrency traders, who are watching the charts, might see this and believe the market is going into recovery. Unfortunately, this is false, and the market continues to decline instead. If you plan to day trade, then you should be wary of these traps.

There are many resources available to help you to learn to identify these traps and avoid falling prey to them. In addition, you can also spend some time practice trading with Bitsgap’s demo features to learn how to identify these traps yourself in real time.

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