Tl; DR:
You don’t know if you are on a bull or bear market? This guide breaks down how to identify the difference using prices, volume, feeling and onchain data. Learn to recognize market cycles, signals to monitor and how to adjust your strategy for each phase so that you can intelligently exchange.
Cryptographic markets can resemble emotional roller coaster, prices that skyrocket a month, then on the next one. You are not alone if you have already wondered if you were on a bull or a lower market.
In the simplest terms:
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A bull market is when prices continue to increase, people are excited and there is a general feeling that the future is brilliant. Think of the end of 2020 and the beginning of 2021; Bitcoin (BTC) has increased from around $ 10,000 to almost $ 70,000. New projects were launched daily and it seemed that everyone from your cousin at your Uber pilot bought crypto.
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On the other hand, a lowering market is when prices drop regularly, investors withdraw and the feeling of the outlines. A good example? 2022. After reaching heights of all time, the market fell. Bitcoin fell below $ 20,000, the projects collapsed (do you remember Terra?), And even veterans traders began to discuss “Building in the Bear”.
Knowing in what type of market helps you make smarter movements, and that is why all this matters. You do not want to seize in the same when a downward trend or panic sale just before a rebound.
Recognition of the phases of the market helps you to invest more strategically, to manage risks and above all, to control your emotions. Which, in crypto, is half of the battle.
Did you know? In England in the 18th century, “Bearskin Jobbers” was the first sellers uncovered, the merchants who sold Bearskins that they did not yet have, the prices of the bets would fall. The saying “does not sell the bear’s skin before catching the bear”, just like the metaphor. The term bull came later, not only as the opposite of the bear, but also because of the upward movement of the horns of a bull during the attack.
Understand the markets of bulls and bears
Of course, the crypto is “numbers on a graph”. But, it is also stories, titles and whole communities that constantly change the mood. Here’s how to understand the bull and bear cycles:
1. Characteristics of the bull market
a) Increase in sustained prices
Prices are increasing on a bull market, of course. What is more important is that they continue to go up, often during the weeks or months. You will see major parts climb regularly and altcoins get on the wave.
An example of a manual? Bitcoin’s Run in 2020-2021, where it went from ~ $ 10,000 to $ 69,000. This rally had momentum, institutional support (Tesla, strategy, etc.) and a serious detail FOMO.
Or the sprint fueled by Dogecoin at the beginning of 2021, going from joke status to $ 0.45 thanks to Elon Tweets and Reddit Hype.
b) positive feeling of investors
You know that feeling is optimistic when X feels euphoric, everyone calls for a Monshot BTC and that new projects are launching daily with assessments from top to bottom. Money flows quickly and even risky bets resemble obvious games. This is when you know that the positive feeling of investors is in the air.
c) Favorable economic indicators
Taurus races often align with low interest rates, easy access to credit and conditions generally suited to technology. During the 2020 Taurus, for example, the recovery controls of the pandemic era and the low borrowing costs gave more ammunition to deploy in digital assets.
2. Characteristics of the bear market
a) Lower prices extended
The bear markets will light up until the cows are home. The prices drop, then drop a little more and each light rebound is sold. Think of “Crypto Winter” of 2018, when Bitcoin went from $ 20,000 to $ 3,000.
Or the brutal slowdown of 2022, when BTC increased from $ 69,000 to $ 20,000. This crash was not really a question of price either; It was fed by implosions such as Terra-Luna, Celsius and the FTX scandal. The dominoes kept falling.
Bear markets tend to feel over.
b) feeling of negative investors
During the bear phases, fear takes over. The headlines become claims, social media calms down and even unconditional believers are starting to question their convictions. Dry funding, development teams become silent and “liquidity exit” jokes make the rounds.
c) Displarable economic conditions
Macro’s opposite winds do not help. High interest rates, fears of inflation or the tightening of monetary policy often aggravates things. In 2022, for example, the aggressive Fed rate increases made risk assets, including the Crypto, much less attractive.
Key indicators to identify the market phases
Although no metric can give you 100%certainty, there is a handful of proven indicators on which traders and analysts count. Decompos the indicators you can use, apart from the obvious that (price).
Trading volume
The volume tells you how conviction is behind price movements.
In a bull market, the rise in prices is often supported by a high commercial volume. More buyers intervene, more liquidity enter the market and the rally feels supported.
During a lower market, volume tends to dry. Price reductions are welcomed with low purchase pressure and it may seem that no one wants to reach the market.
Low volume plus a decrease price? Not an excellent sign if you hope for a rebound.
Did you know? During the Bull Run 2021, Dogecoin experienced an increase in the volume of negotiation, with nearly $ 70 billion negotiated in a single day when its price climbed to $ 0.45
Market feeling
A tool on which many investors count is the Crypto Fear & Greed index. He measures social media activity, volatility, Google research trends and even more to assess whether investors feel optimistic (greedy) or pessimists (scary).
Extreme greed often appears near the summit.
Extreme fear tends to appear close to the bottom, although it can drag in deeper slowdown.
Check it daily, but don’t let it drive your whole strategy. It’s a mood ring, not a crystal ball.
Technical indicators
You don’t need to be a graphic assistant to locate some useful signals.
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Mobile mediums: When the price is constantly higher than the 200 -day mobile average, it is generally optimistic. When it dives below, it is often a warning sign. These are long -term trend indicators, not day trade tools.
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Relative force index (RSI): This measures if an asset is exaggerated or occurred: readings above 70 suggest that it is overheated and due to a decline, while readings less than 30 years may indicate that it occurred with rebound potential.
None of this is the Gospel, but it helps you feel a momentum.
Fundamental factors
Sometimes the biggest movers do not appear on a graph.
Haussiers signs may include:
Meanwhile, the lower signs often look like:
Once you know what to look for, the next step is to determine where. Fortunately, Crypto is delivered with a free tool treasure if you know where to dig.
Mapping platforms
If you want to understand the price action, you need solid graphics.
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TradingView is known for customizable graphics and technical indicators.
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Cointtelegraph offers clear prices, stock market capitalizations and volume trends that are particularly useful for following more recent or smaller tokens.
Did you know? TradingView mapping tools are integrated directly into many exchanges of cryptography in the world, including Binance, Bybit, OKX and Bitget.
Analysis of feelings
Crypto is more mood than mathematics.
Tools like Lunarcrush follow social media activity, influence buzz and trendy tokens. If Dogecoin begins to warm up, you will probably see the first signs there.
Wave data
Do you want to know what whales do? Platforms such as glass data and cryptocurrency surface data such as wallet flows, minors’ activity and exchange balances. It’s like reading the cardiac rhythm of the blockchain. You will often see the quarters of capital before running at the price.
Strategies to navigate in different market conditions
Understanding the cycle is one thing. Knowing how to act is another. Your manual must change depending on whether you drive a bull or survive a bear.
Haussier market strategies
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Next trend: When the market is hot, the best movement is sometimes to follow the flow, but to remain disciplined. Focus on active ingredients in strong strong trends and do not be taken to hunt green candles without plan.
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Profit for profit: Set targets and honor them. It is easy to become greedy when any pump, but taking the profits by going up helps you avoid the dreaded round trip: watch your gains disappear during the next catch-up.
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Risk management: Even bull markets are retreating. Use stops or train stops to lock the gains and keep against surprise inversions. You will thank yourself later.
Bear market strategies
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Defensive positioning: Sometimes the smartest trade is not a business. Move a part of your wallet in stablescoins or stick to less volatile assets such as Bitcoin and Ether (ETH) can help preserve capital while others panic.
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Trial seasons at a dollar (DCA): Are you trying to timed the exact background? Good luck. DCA smoothes the journey by distributing your entries over time, by reducing your average cost and helping you remain engaged without engaging too much.
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Focus on fundamental principles: Bear markets remove noise. What survives are projects with real use, solid teams and long -term vision. If you are slowing down, be sure to hold on for the right reasons.
By not preparing, you prepare to fail
Bull or Bear, the crypto keeps moving, but that does not mean that you have to react to each swing. Price trends, feeling changes, volume models and fundamentals can all tell you where you are in the cycle. Armed with good tools and a calm state of mind, you can guide noise and act with clarity.
The markets reward the preparation and know if you are in Taurus territory or in the country is one of the most powerful tools you can have.
HAPPY TRADING!
This article does not contain investment advice or recommendations. Each investment and negotiation movement involves risks and readers should conduct their own research when they make a decision.
