?>

A Comprehensive Guide on Crypto Bear And Bull Markets

2.4 k views

If you are new to investing in the crypto market, you’ve likely heard people talking about crypto bull/bear markets or crypto whales, but you might not be sure what they mean.

The truth is that it’s possible to make money in both bull and bear markets, but there are different strategies for each. That said, investors should be cautious when putting their money into cryptocurrency markets, no matter what type of investing environment we are experiencing, because there are serious pitfalls to avoid.

This guide will cover precisely what bears and bulls mean for your investments and examine some strategies you can use in both markets.

The Bears

When we talk about a cryptocurrency bear market, we refer to a market situation defined by caution and pessimism during which traders are much more likely to sell than buy.

An excellent example of this is Bitcoin’s downturn in 2018. At the beginning of 2018, BTC prices started plummeting, which considerably shook buyer confidence. After prices began to fall, investors holding BTC panicked and sold their investments, putting tremendous pressure on the market.

While owning a losing investment can make anyone depressed, it does present an exciting opportunity. Bearish crypto markets tend to reduce the prices of every project since they all follow BTC very closely.

This means that investors willing to wait out this depression could find themselves in a perfect position when the bear cycle decides to recede. Conversely, for value investors, crashing cryptomarkets can present a brilliant opportunity.

However, investors looking to take advantage of these prices should spend a good deal of time researching their chosen digital assets. If you can find a decent deal on a token or coin that you think has a substantial project and use case, then you have an excellent chance to establish a position that you otherwise wouldn’t have had access to in different market conditions.

As an investor, it’s vital not to mix up a bear market with a price correction in the charts. A bear market is a sustained period characterized by noticeable downward movements. A price correction takes place when the price of an overvalued digital currency corrects itself.

Bull Markets

Typically a bull market is one defined by optimism and investor confidence. If the market trend is up, we’re witnessing a bull market.

Cryptocurrency investors experienced this toward the end of 2017, and they saw many of their investments skyrocketing overnight. As a result, a lot of new money entered the cryptocurrency space, which pumped a ton of money into many projects.

The massive gains brought about this interest bitcoin experienced, attracting the mainstream media’s attention and dragging in those who had never heard of or at least had never been interested in cryptocurrency before.

Investors coming into space during a bull run should be highly cautious. What goes up must come down, and it’s easy to buy in at the top when the bulls are running. While this can feel like a great decision at the time, you could be setting yourself up for a disaster a couple of months down the road.

When choosing your investments, you should carefully analyze each asset to ensure it is not trading at an inflated and unstable price.

Preparing Your Crypto Portfolio For a Bear Market

If everything is crashing down in the markets and you’re afraid that a bear market may be imminent, it may be in your best interest to reduce many of your positions. Positions in less proven digital currencies may especially then be highly inflated. Even top coins like Bitcoin and Ethereum can experience massive losses in bear markets.

Your best option would be to move your crypto holdings to stablecoins such as tether (USDT) and Circle’s USD Coin (USDC). Stablecoins are unique digital assets meant to be stable and valued equally to a real-world asset, such as the U.S. dollar.

This gives a stablecoin two significant advantages: a lack of volatility – a problem for even some top cryptos such as Ethereum – and a certain measure of trust. Moreover, being a virtual currency rather than fiat, stablecoins are ideal and quick for inter-cryptocurrency trading, allowing you to quickly buy BTC and other top tokens once crypto markets start recovering.

Numerous quality altcoins will often be available for rock-bottom prices during a bear market. You could likely double or even triple the number of digital assets in your portfolio by taking profits at the right time and then buying back later.

Preparing Your Portfolio During the Bulls

If the bleeding in your investments seems to have stopped, and you can see volume starting to pump back into different projects, it might be time for the bear market to go into hibernation. Of course, it’s often tough to identify the bottom, but if the market has been chopped down at the knees, it’s likely a good time to start accumulating.

Keep in mind that investors will likely be much pickier when buyer confidence and trading volume return if they have been burned previously. Therefore, be careful only to place your investment in substantial projects with excellent and practical use cases. On the other hand, this is a great time to get in on projects that may have been too costly for you to invest in.

Research is essential, and you should never invest more money than you can afford to lose. However, cryptocurrencies are still very new as far as financial instruments are concerned and are incredibly volatile. Therefore, it’s essential to diversify your assets to secure your financial future.

Bitcoin Could Be On the Verge of a Full-blown Bull Run

Since the $3,700 low witnessed on March 12th, dubbed Black Thursday, Bitcoin has surged higher, rallying as high as $7,470 in an inspiring run. While impressive, the king crypto is not yet in a full-blown bull run, but analysts are gaining confidence a bull run is near.

Glassnode, a leading cryptocurrency data firm, suggested on April 15th, 2020, that according to one of its proprietary indicators that accurately timed Bitcoin’s market tops, a full-blown “bullish trend reversal” may soon be confirmed.

Although Glassnode’s indicators do not explicitly point to the commencement of a BTC bull market just yet, many well-known crypto analysts are convinced that this period of the market cycle is imminent.

Speaking to Bloomberg, Mike Novogratz — CEO of Galaxy Digital and a former Goldman Sachs partner — remarked that he remains long on gold and Bitcoin, citing monetary policies being implemented to combat the coronavirus that will result in printing money en-masse.

Novogratz also signaled that he’s bullish on Bitcoin because he has noted it sees strong adoption from institutional players, specifically pointing towards high-net-worth individuals and hedge funds entering the industry.

Whales

‘Whales’ can be defined as persons who hold a significant amount of a specific digital token that when they make a move to buy or sell, they don’t just make a splash in the market – they make waves!

These waves can be large enough to impact the whole market significantly. For example, as crypto markets crashed on March 12th, 2020, Whale Alert detected two consecutive transactions in BTC worth about $21.7M. The transfer was made between the crypto wallets of Binance, the largest exchange in the crypto space. It later turned out that crypto whales were pushing the BTC price down to $6,000 to buy the dip before the next bull market broke out.

An example of a whale could be Vitalik Buterin, Founder of Ethereum, who currently holds about 350,000 ETH. Since they have extensive crypto holdings and the crypto markets’ unregulated nature, whales can move prices in their desired direction.

Many cryptocurrency traders pay close attention to whales and watch how, when, and where they trade. This way, they can go for the ride and profit alongside the whale – or avoid going against it, as that would result in losses.

It’s not all that easy to spot a whale. You need to look out for abnormal changes in prices and volatility during periods expected to be quiet and stable.

Final Thoughts

If you’re aiming to become a prosperous crypto investor, you’ll probably need to be able to respond to bear and bull markets in the right way and, where possible, align your trading action with those of famous whales. As a general rule of thumb:

  • Buy the dips in a bull market.
  • Sell the rips in a bear market.
  • Do both in a stagnant market.

Fully understanding what a bull or bear market means for crypto prices could be the difference between making substantial profits and suffering significant losses.

Bitcoin coin symbol
Btc
Bitcoin
$62.547
price
red chart
decrease symbol0.84959%
price change
TRADE NOW

More importantly, growing familiar with the terms frequently used by the crypto community will allow you to keep up with more in-depth scrutiny of behavioral tendencies and price fluctuations.

Previous

Block.one: The Leader in High-performance Blockchain Solutions

Next

COVID-19 Website Seized After an Attempt to Sell the Domain For Bitcoin

Written by

561 posts

A part-time trader with a fine eye for detail. Over the years, I have developed an intriguing interest in blockchain technology and enjoy writing about cryptocurrencies.

VIEW AUTHOR

More author posts

How SolidProof Ensures Transparency and Security through Audit and KYC Systems

Solidproof is among the most trusted blockchain security and smart contract auditing companies in the crypto market today. The Germany-based company aims to fix the security and transparency issues smothering the crypto space. But, unfortunately, as the industry attains more progress, so do the opportunities for bad actors to victimize honest investors. According to a yearly report on crypto crimes by Chainalysis, $14 billion of all transactions in crypto in 2021 were associated with scams or money laundering. These figures…

The Importance of Backtesting Crypto Investment Strategies

Crypto backtesting involves running and applying a specific trading strategy to historical market data to evaluate how it would have performed. The analytical method delivers a clear overview of qualified strategies that can be applied in a real-world environment using real capital. The mathematical simulation provided by crypto backtesting is an essential component that traders use to analyze past market data and ultimately develop an effective trading system. The process can empower investors to pick out a crypto strategy that…

aelf Announces Its First Metaverse-Themed Hackathon with Money Prizes

aelf network has announced its metaverse-themed Hackathon, “Top of OASIS,” which will take place on December 12, 2021. The platform encourages all potential participants to advance their project proposals by February 9, 2022. Additionally, aelf will offer full support to all the projects participating in the Hackathon. Developers can register their blockchain projects, including DeFi and GameFi proposals, and compete for spots in aelf's prizes pool. Top of Oasis Hackathon Main Dates Top of OASIS is aelf’s first metaverse-themed blockchain…

Institutional Investors who have Expanded their Portfolio in 2021

Cryptocurrency and blockchain investments from the first nine months of 2021 have surpassed last year's total. In the first half of 2021, the worldwide crypto and blockchain activity was $8.7 million, more than double last year's figures. It is a significant sign that institutional money is streaming into crypto. Furthermore, it increases the investor base, and thus the institutional awareness and knowledge of this sector are also surging. The "institutional adoption" of crypto is already underway. Today we focus on…

Understanding Cardano, IOHK, and EMURGO

Cardano is the first decentralized public blockchain platform developed on a research-first-driven approach. Charles Hoskinson, the co-founder of Ethereum, created it in 2015 and later launched it in 2017. It comprises a development team of global researchers and engineers. This platform's development continued thanks to academics, computer scientists, and their peer-reviewed papers. The Cardano ecosystem involves three founding entities that work together. These partners are EMURGO, IOHK Company, and The Cardano Foundation. Cardano in a Nutshell Cardano is a public…

Billionaires Who Have Publicly Showed Interest in Cryptocurrencies

The cryptocurrency boom of 2017 saw a rise in their acceptance from prominent economic figures. Since then, their volatility has continued significant investments in them. Today there's a push for their global mass adoption. Industry-leading lights and renowned celebrities have expressed their support for the assets. Nothing best captures this reality than Forbes's recent list of the world's wealthiest people. It indicates a growth in the number of crypto billionaires over time. From an asset that courted controversy and skepticism,…

Publish your own article

Guest post article. Guaranteed publishing with just a few clicks

START PUBLISHING ADVERTISE WITH US

Browse categories

Explore trending topics in the crypto community right now.

Bitcoin

SEC Greenlights Multiple Bitcoin ETFs, Signaling Major Leap for Cryptocurrency Markets

The U.S. Securities and Exchange Commission (SEC) has made a landmark decision by approving 11 spot bitcoin exchange-traded funds (ETFs). This move represents a significant moment in the cryptocurrency industry, marking a shift towards greater institutional adoption and accessibility for investors. The approved ETFs include products from major firms such as BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, ARK 21Shares Bitcoin ETF, Bitwise Bitcoin ETP Trust, WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Trust, VanEck Bitcoin Trust, Invesco Galaxy Bitcoin…

Bitcoin Should be Banned in the United States: Charlie Munger

Berkshire Hathaway’s vice chairman, Charlie Munger, called for a ban on cryptocurrency in the United States on Monday, similar to the one in China.  In an op-ed published with the Wall Street Journal, Munger argued that Bitcoin isn’t a currency, commodity, or security, but simply a form of gambling “ with a nearly 100% edge for the house. As such, the enactment of a federal law should ban such things from happening. Munger cited the Chinese communist party’s ban on…

Tesla’s BTC Positions Remained Unchanged in Q4 of 2022

According to a new earning report from automotive manufacturer Tesla, the company did not sell any of its BTC holdings in the fourth quarter of 2022. Amid speculations that the company had traded BTC during the testing bears, CEO Elon Musk revealed it was yet holding on to its BTC stash. Tesla Maintains Holdings After Initial Sell-Off In Q2 of 2022, Tesla opted to sell 75% of all its BTC. The car manufacturer received close to $950M in exchange. Notably,…

Here’s When Grayscale Debates the SEC in Court on its Bitcoin Spot ETF

The District of Columbia Court of Appeals has marked a date for when Grayscale and the Securities and Exchange Commission (SEC) may present oral arguments regarding the approval of a Bitcoin spot ETF.  Each side will present its case at 9:30 am ET on March 7, with the SEC arguing against the product, and Grayscale arguing in favor.  Grayscale VS SEC The court date – revealed in a court order filed on Monday according to CNBC – is much earlier…

MORE ARTICLES

Ethereum

Ethereum’s Zhejiang Staking Withdrawal Testnet for Shanghai is Live

At 15:00 UTC on Wednesday, the much-anticipated Zhejiang testnet for staking withdrawal went live on Ethereum’s Beacon chain. Zhejiang will enable the testing of the Ethereum Improvement Proposal (EIP) 4895 which allows for staking withdrawals. This is in preparation for the network’s next major update, the Shanghai hard fork slated to launch sometime in March. Users Can Make Simulated Withdrawals with Zhejiang In a tweet yesterday, DevOps engineer at Ethereum foundation Barnabas Busa gave details about the Zhejiang testnet slated…

Ethereum Devs Disagree Over Technical Tweak as Shanghai Upgrade Nears

Post-merge Ethereum users have been eagerly awaiting the commencement of the network’s next major upgrade, Shanghai. However, after over 3 months of prep time, it appears the Shanghai rollout isn’t going as smoothly as expected. What Exactly is the Shanghai Upgrade? In September last year, the much-publicized Ethereum Merge also known as the Ethereum 2.0 upgrade went live. Ethereum underwent some significant changes as its consensus mechanism transitioned from proof-of-work to a cost-efficient proof-of-stake system.  However, since the Beacon launch…

FTX Hacker Converts 50k Stolen ETH to BTC

Per a report from blockchain analysis firm Chainalysis, the attacker behind the Nov 11 FTX exploit, is converting the stolen ETH to Bitcoin. There were muted fears the seemingly inexperienced perpetrator could dump all its ETH holdings. On Sunday, the attacker dumped 50k ETH on-chain, with ETH's price dipping by almost 7%.  https://twitter.com/chainalysis/status/1594349583416840199?s=20&t=pgvQHeVytI20eKQ1ls9bxw Hacker Moves 50,000 ETH to New Address Over the past week, the perpetrator had been steadily swapping the cryptocurrencies they had carted off for Ether tokens. This…

Censorship Concerns: 51% of Ethereum Blocks Now OFAC Compliant

According to new data, over half of the blocks on the Ethereum network now reportedly comply with the US Treasury OFAC’s standards. This comes roughly a month after the platform’s monumental merge update. Phasing Out Tornado Cash The Office of Foreign Assets Control is the intelligence and enforcement agency of the US  Treasury Department. Indeed, the OFAC administers and enforces US  financial sanctions. A prime example of this is the recent, highly-publicized ban on crypto mixer Tornado Cash.  According to…

MORE ARTICLES

Trading

How to Leverage Arbitrage Opportunities in Crypto Markets

Cryptocurrency arbitrage has become an increasingly popular investment strategy as the crypto market grows and evolves. Arbitrage involves taking advantage of pricing discrepancies between markets or exchanges to profit.  Investors can leverage profit opportunities by understanding cryptocurrency arbitrage while managing associated risks. In this guide, we'll explore cryptocurrency arbitrage and how it works. A Bitcoin-related example will help us illustrate the concepts of this strategy. What is Arbitrage and How Does it Work in Crypto Markets Crypto arbitrage trading is…

The Different Types of Copy Trading in Crypto

Are you interested in trading cryptocurrencies but feel intimidated by the complexity of the process? Copy trading is a great way to get into crypto without needing to be an experienced trader. With copy trading, investors can benefit from the experience and knowledge of more experienced traders, allowing even beginners to succeed. How does copy trading work, and which tips do you need to know to succeed? In this article, we'll explore all aspects of copy trading in crypto. What…

How to Spot an Unsafe Crypto Exchange

Cryptocurrency exchanges have become increasingly popular as they provide a platform for people to buy and sell digital assets. Unfortunately, not all crypto exchanges are safe or reliable.  With the rise of cybercrime and fraud, you must learn to spot an unsafe crypto exchange before investing your money. This guide will help beginners identify and avoid potential risks when selecting a cryptocurrency exchange.  The Role of Crypto Exchanges on the Digital Assets Market Cryptocurrency exchanges play a crucial role in…

What Is Grid Trading in Crypto?

Crypto grid trading has become a popular strategy because of its ability to help traders capitalize on market volatility. Grid trading means you can produce consistent profits by taking advantage of price differences in different markets or time frames. By establishing buy and sell orders at predetermined intervals, you can take advantage of these fluctuations in an automated way. This guide will explore the different aspects of grid trading and provide an overview of its benefits, challenges, and more. Through…

MORE ARTICLES

Tech

Introducing una Messenger: A Paradigm Shift in Blockchain Connectivity

The digital landscape is set for an unprecedented transformation with the introduction of una Messenger, the latest innovation from web3 development powerhouse Wemade. This platform represents an evolution of the "PAPYRUS Messenger," serving as the cornerstone of the ambitious "unagi" initiative, aimed at catalyzing the mass adoption of blockchain technology. The "Unbound Networking & Accelerating Growth Initiative" seeks to bridge the divides between diverse blockchain services and networks, heralding a new era of interconnectedness. A New Frontier in Blockchain Communication…

Bit2Me Champions WEMIX Token in Pioneering European Listing

Bit2Me, Spain's premier virtual asset exchange, has recently broadened the horizons for cryptocurrency enthusiasts by listing WEMIX, the cornerstone token of the WEMIX3.0 blockchain ecosystem. This marks a notable achievement as WEMIX's inaugural venture into the European market, emphasizing the token's role in facilitating a range of blockchain-based activities, from gaming transactions to decentralized finance (DeFi) applications. Launched with the intention to democratize access to WEMIX for the 450 million Spanish speakers around the globe, this strategic move aligns with…

CryptoVirally Expands with Fresh Crypto Marketing Offers and Cointelegraph Upgrades

In an exciting update for the cryptocurrency marketing landscape, CryptoVirally has announced a series of new entries and enhancements to its already comprehensive range of services. These updates, aimed at providing tailored marketing solutions for crypto projects, include new limited-time offers and expanded options for Cointelegraph publications. Limited Offers: A Game-Changer in Crypto Marketing  CryptoVirally's limited offers section presents an enticing opportunity for crypto projects to leverage high-impact marketing services at discounted rates. These offers, available for a limited period,…

Breaking Boundaries in Blockchain: WEMIX’s ‘una Wallet’ Sets New Standard for Multi-Chain Asset Management

The WEMIX Foundation has unveiled 'una Wallet,' a revolutionary digital wallet designed to offer unparalleled convenience and security in managing digital assets across various blockchain networks. The announcement, made on January 17, 2024, signifies a new era in the seamless integration of multiple blockchain protocols, including Arbitrum, Avalanche, BNB Smart Chain, Ethereum, Kroma, Optimism, Polygon, and WEMIX3.0. 'una Wallet' is more than just a digital wallet; it represents the culmination of WEMIX's innovative efforts in the blockchain space. It serves…

MORE ARTICLES