How Bull markets Differ From Bear Markets and The Opportunities For Crypto Traders
The origin of the notions of bull and bear markets came from the stock exchange. But now, these terms have penetrated the cryptocurrency market, which was inevitable. Anyone trading cryptocurrencies will have come across the terms bear markets and bull markets, which can be confusing for a beginner.
If at any point you confuse these terms, simply remember that bulls lift their horns and simply run forward, while bears wave their paws and halt to fight. The truth is that bull and bear markets can greatly affect the mindset of investors. How may you wonder? Well, first let’s define these market terms and how to distinguish what type of market you are in.
What is a bull market?
The bull market is similar to the strategy the bull uses for hunting. It features upward trends over a short period. Bull market is characterized amongst investors by their optimism, as they bring expectations of prices to rise. As such, during a bull market, investors are more likely to grow confident as their expectations is based on achieving the same result over an extended period.
What is a bear market?
The bear market is the opposite of the bull market. A bearish market is one where over a relatively short period there is a substantial market downtrend. It is when you see that the prices start to rapidly drop. Some investors say that the market can be classified as a bear market when you start experiencing a 20% dip over 60 days or more. Although the 20% figure is arbitrary, and trends are sometimes not that obvious.
Bull vs bear markets
In both bull and bear markets, there is the opportunity to make money. So, you don’t have to take out too much on either the bear or the bull. One critical thing to always remember is that strategies differ significantly for each market. So, it is important to know what type of market you are in so that it will be easy to know which trading strategy to implement.
Like any investment, cryptocurrency investment is always going to be a risk. However, to minimize the risk, you can do your research and never invest money you are not willing to lose. Remember that digital assets like cryptocurrencies are still in their infancy stages and maturing with time. So, they can be very volatile.
With everything said so far, there are ways you can take advantage of both kinds of markets. While the bear market portrays downward trends, that does not mean that there aren’t opportunities to make money. Firstly, let’s look at the bull market and how to take advantage of it.
Generally speaking, when investors get into a bullish market early, they have a higher change of taking advantage of it, using the rise in prices to make a quick buck, and leaving the market as soon as the asset reaches its peak. Although no one has a definite answer to when it will reach its peak, still you have to observe your investment, that way losses may be temporary and minimal.
As for the bear market, exploiting it is a bit complex. As an investor you will have to use a strategy known as short selling to earn more. This strategy is borrowing tokens in a dip and hoping to redeem them at a lower price. Note, this is an extremely risky trade and only experienced traders understand how it works.
In the cryptocurrency market, profit and loss are certain. What most people are not aware of is the fact that if you are trading continuously, a rise or fall in price does not stop you from making profits, although the volume might be impacted when prices are on a downswing. For crypto platforms like BoliesTV, the window for earnings is not disrupted by the direction of the market. You can wager all-year round and make money on your favorite games or players on live games, and tournaments on BoliesTV.