What is a Bull Market?

The concepts of Bull Markets and Bear Markets are very common terms in the financial sector. A bull market refers to the situation when the market enters an uptrend. It is a financial market situation in which prices rise or are expected to rise. The term bull market is often used in stock market transactions, but can be used on almost any type of asset that is traded, such as bonds, real estate, commodities or cryptocurrencies.

 

How Is a Bull Market Defined?

The most common definition used to explain a bull market is a market or cryptocurrency rising 20% ​​or higher from its low. Since cryptocurrency markets are smaller and more volatile than traditional markets, it is quite common to see 40% price increases in a very short time. After these 40% increases, it is possible to see strong and consistent bull runs.

 

HOW TO UNDERSTAND THE BULLISH MARKET?

Bull markets usually happen when the economy is or is already in a strong state. The bull market continues, fueled by the constant rise in prices. Investor confidence will tend to climb during a bull market period. Investors believe that this uptrend will continue in the long run. It indicates a very logical time frame for traders who want to make profits. There are many factors that contribute to the formation of a bull market. Factors such as the increase in the Gross Domestic Product rate in traditional markets and the decrease in unemployment rates create positive market conditions and increase the confidence of investors. These factors can also have an indirect impact on the cryptocurrency markets. However, as cryptocurrency markets are relatively small and volatile as mentioned earlier, they are not always associated with traditional market factors.

Although the 20 percent increase in the market is generally seen as the beginning of an uptrend, it may not be enough to give the signals of the upcoming bull market. Investors and analysts use a variety of tools to help understand market signals. Some of the technical analysis indicators are especially useful for following these trends. Especially MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) indicator are some of them.

As a result, bull markets are markets where investors' confidence in cryptocurrencies increases, especially in crypto money markets, as in many markets.

 

You can reach our article on Bear Markets, which is the opposite of bull markets, from the link below.

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