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  1. Home
  2. Akademie
  3. 2.10 Bull markets vs Bear markets
  • 2.01 Why to invest in cryptocurrencies
  • 2.02 How to start cryptocurrency trading
  • 2.03 Common crypto trading terms
  • 2.04 Understanding market capitalization
  • 2.05 Bid-Ask spread and slippage
  • 2.06 Market participants explained
  • 2.07 Measuring market depth and liquidity
  • 2.08 Three major types of trade orders you need to know
  • 2.09 Fundamental and technical analysis for crypto trading
  • 2.10 Bull markets vs Bear markets
  • 2.11 What is arbitrage trading?
  • 2.12 How to earn cryptocurrencies without trading?
  • 2.13 What is paper trading?
  • 2.14 What are the common cryptocurrency scams?
  • 2.15 How to trade crypto responsibly
Vorherige Lektion

2.10 Bull markets vs Bear markets

This lesson explains bull and bear markets and what you can do in each case.

article
Zonda Team
14 Januar 2022
18 August 2022



In the financial landscape, the terms ‘bull’ and ‘bear’ are often used to identify the market conditions. Whether it is a cryptocurrency, stocks, real estate, or any other trading market, there are two ways to describe it - a bull market and a bear market. Trading markets often experience upward and downward price movements based on the asset’s adoption, popularity, demand, and various other factors. 

The price fluctuations are more rapid in the case of the cryptocurrency market and it is also referred to as a bull market or bear market based on its condition. The direction of the market has a huge impact on your investment portfolio. Keep on reading to understand bull and bear markets. 

This lesson explains bull and bear markets and what you can do in each case.  

Contents 

  • What is a bull market?
  • What is a bear market?
  • Why is a market called ‘bullish’ or ‘bearish’?
  • What to do in each case to gain more profits?

What is a bull market?

When the price of an asset is on the rise for a long period of time, the market is known to be ‘bullish’ or called a ‘bull market’. 

In the period of bull run, a majority of investors will be buying. As a result, the demand for a particular asset increases a lot more than supply. When investors are confident or ‘bullish’, they invest more money into the assets with the anticipation of prices increasing further. This could be the start of a bull market. 

As the crypto market is still in its early stages, the price of a coin is influenced substantially by the confidence of investors in that asset. When a large group of people invests, the price of an asset increases which further draws investments from other investors, and the prices continue to increase. 

What is a bear market?

When the price of an asset continues to decrease for a long period, the market is known to be ‘bearish’ or called a ‘bear market’. 

In a bear market, the supply of an asset is larger than the demand. Investors are pessimistic and less confident about buying a particular asset. The bear market is completely opposite to the bull market. The prices continuously fall in this situation and until the market has fallen by more than 20% from the recent high values, it is not considered a bear market. 

It is highly difficult to estimate when a bear market ends and when the bottom price has reached because recovering is a very slow and unpredictable process. Investors who believe that the price will fall are known as ‘bears’ and a majority of them start selling the assets instead of buying. This results in a further downward trend in the market.  



Why is a market called ‘bullish’ or ‘bearish’?

Like a lot of financial terms, the origins of the terms ‘bull market’ and ‘bear market’ are not clear. Most investors believe that they are derived from the way of animal attacks. While fighting, bulls usually thrust their horns upward so when prices are moving in the upward direction, the market is called ‘bull market’. On the other hand, bears swipe downwards with their claws while attacking the opponent, so when prices are following a downward trend, the market is called ‘bear market’. 

What to do in each case to gain more profits?

In the case of a bull market, you can take advantage of the rising prices by buying the assets at the beginning of a bull trend and selling it when the price reaches its peak. As we discussed in the previous lessons, fundamental and technical analyses tools help estimate the price movements approximately. As a result, you can make better decisions on when to buy or sell a particular asset to make more gains. 

On the other hand, selling your holdings in a bear market may result in incurring a loss. One of the strategies to deploy during a bear market is to hold your assets strong. Alternatively, if you have a long-term trading strategy, investing in a bear market can lower your buying price of coins. Various factors like economic growth, investor psychology, news, and events from different parts of the world influence the price movements of trading markets. 

While you are trading volatile assets like digital assets, always keep an eye on the price fluctuations and trends followed by the market to make the most of your investments. In the next lesson, we look at another significant trading strategy: arbitrage trading. 

DE

This material does not constitute investment advice, nor is it an offer or solicitation to purchase any cryptocurrency assets.

This material is for general informational and educational purposes only and, to that extent, makes no warranty as to, nor should it be construed as such, regarding the reliability, accuracy, completeness or correctness of the materials or opinions contained herein.

Certain statements in this educational material may relate to future expectations that are based on our current views and assumptions and involve uncertainties that could cause actual results, performance or events to differ from those statements.

BB Trade Estonia OU and its representatives and those working directly or indirectly with BB Trade Estonia OU do not accept any liability arising from this article.

Please note that investing in cryptocurrency assets carries risks in addition to the opportunities described above.

Nächster Lektion

2.11 What is arbitrage trading?

2.11 What is arbitrage trading?
Vorherige Lektion
16 / 1 / 22
Essentials
Economics
Investing

2.04 Understanding market capitalization

This lesson centers on understanding cryptocurrency market capitalization.

Weiterlesen
2.04 Understanding market capitalization
16 / 1 / 22
Essentials

2.03 Common crypto trading terms

This lesson is a compilation of the most commonly used crypto trading terms.

Weiterlesen
2.03 Common crypto trading terms
16 / 1 / 22
Bitcoin
Altcoin
Essentials

2.01 Why to invest in cryptocurrencies

This lesson explains why cryptocurrencies might be a good asset to include in your investment portfolio.

Weiterlesen
2.01 Why to invest in cryptocurrencies
14 / 1 / 22
Essentials
Trading
Investing

2.07 Measuring market depth and liquidity

This lesson explains market depth, market liquidity, and volatility.

Weiterlesen
2.07 Measuring market depth and liquidity
14 / 1 / 22
Essentials
Trading
Investing

2.08 Three major types of trade orders you need to know

This lesson explains three major types of trade orders and how they work. 

Weiterlesen
2.08 Three major types of trade orders you need to know
14 / 1 / 22
Essentials
Trading
Investing

2.09 Fundamental and technical analysis for crypto trading

This lesson focuses on explaining how fundamental and technical analysis will help you assess cryptocurrencies.

Weiterlesen
2.09 Fundamental and technical analysis for crypto trading
14 / 1 / 22
Bitcoin
Essentials

1.08 What is Bitcoin?

In this lesson, we dig deep into the roots of the crypto and blockchain tree - Bitcoin.

Weiterlesen
1.08 What is Bitcoin?
14 / 1 / 22
Bitcoin
Essentials

1.10 Sending and receiving Bitcoin

In this lesson, we explain how to send and receive Bitcoins.

Weiterlesen
1.10 Sending and receiving Bitcoin
13 / 1 / 22
Altcoin
Essentials

1.14 The fundamentals of altcoins

In this lesson, you learn about the fundamentals of altcoins.

Weiterlesen
1.14 The fundamentals of altcoins
13 / 1 / 22
Altcoin
Essentials
Ethereum

1.20 What is Ethereum and how does it work?

This lesson helps you decode Ethereum thoroughly.

Weiterlesen
1.20 What is Ethereum and how does it work?
13 / 1 / 22
Essentials
Safety

1.07 Best practices to keep your crypto safe

This lesson provides you with valuable tips and tricks to keep your cryptocurrencies safe.

Weiterlesen
1.07 Best practices to keep your crypto safe
13 / 1 / 22
Essentials
Safety
Wallet

1.06 Understanding crypto wallet terms

In this lesson, we take a deep dive into crypto wallet terms like public and private keys, wallet address, and ...

Weiterlesen
1.06 Understanding crypto wallet terms
13 / 1 / 22
Essentials
Safety
Wallet

1.05 Storing crypto: where and how?

In this lesson, we explain how and where to store cryptocurrencies.

Weiterlesen
1.05 Storing crypto: where and how?
13 / 1 / 22
Bitcoin
Altcoin
Essentials

1.04 Cryptocurrency coins vs tokens: what is the difference?

This lesson explains the differences between crypto coins and tokens. 

Weiterlesen
1.04 Cryptocurrency coins vs tokens: what is the difference?
13 / 1 / 22
Bitcoin
Altcoin
Essentials

1.03 Cryptocurrencies vs fiat money: similarities and differences

In this lesson, you will understand both the similarities and the differences between cryptocurrencies and fiat ...

Weiterlesen
1.03 Cryptocurrencies vs fiat money: similarities and differences
13 / 1 / 22
Essentials
Blockchain

1.15 The basics of blockchain technology

This lesson explains what blockchain is and why it is the frontier to the next revolution.

Weiterlesen
1.15 The basics of blockchain technology
13 / 1 / 22
Bitcoin
Altcoin
Essentials

1.02 What are cryptocurrencies?

In this lesson, you will learn about the basics of cryptocurrencies. 

Weiterlesen
1.02 What are cryptocurrencies?
12 / 1 / 22
Bitcoin
Altcoin
Essentials

1.01 This is why you can no longer ignore cryptocurrencies

Here are a few reasons for you to start with the Zonda Academy and take your crypto knowledge to the next level.

Weiterlesen
1.01 This is why you can no longer ignore cryptocurrencies

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