A bull run (also known as a bull trend) is a period of time in the financial market when the prices of particular assets continue to rise. The quick rise in prices can be attributed to a number of market factors, including volatility, demand, and market valuation.
Bull Run in the World of Cryptocurrencies
The value of crypto assets rises steadily over the course of a market cycle during a crypto bull run. This is the point in a market when investors show a great interest in a certain asset, causing demand for that asset to rise. Finally, the demand for the aforementioned digital asset outnumbers the supply, showing that cryptocurrency investors are bullish. The process that determines the value of a crypto asset is strongly linked to the mindset of the investors involved.
The length of a bull run can last from several months to even years. It can definitely vary but it must be a prolonged period of time to be recognized as a bull run.
A market that is experiencing a bull run is called a bull market. It’s the opposite of a bear market, in which asset prices tend to fall over an extended period of time.
Also, investors who believe that the price of an asset could rise can be considered to be bullish while those, who believe the opposite, would be referred to as bearish.
What Causes a Bull Run in the Crypto Market?
There are various reasons that can cause a bull run. Investor optimism and confidence can be one of the reasons that would make prices rise over an extended period of time. Though the most common trigger that causes bull runs in the cryptocurrency markets is Bitcoin halving.
A great example of a bull run in the crypto world happened in January 2017, when Bitcoin’s price topped $1,100, hitting a new all-time high. Within a few months, the coin’s value had risen to around $20,000 per coin. In less than a year, it became 20 times bigger than before.
Similar to the price increase in 2013, the price increase in 2017 occurred one year after the Bitcoin halving event. One of the most notable features of this time period was that, for the first time in history, general people became interested in cryptocurrencies. Articles about Bitcoin began to appear in the mainstream media. The majority of the price increase happened due to the fact that new individual investors entered the market.
What Is a Bear Trend?
The bear trend is the opposite of the bull trend. It mostly occurs when the market value drops by more than 20% (though this is just a common way to define it, it’s not fixed). Investors are afraid to sell their assets and lose money as long as the bear market is taking place.
However, there are many people that see bear markets as a way to make money due to the low stock prices. Though this requires finding the right entry point into the market which might be difficult to do. Besides, timing the bottom is difficult too.
