Bull market vs bear market
A bull market is an ‘upward’ trend, and a bear is ‘downwards’.
The meaning comes from these animals’ attacking structure; the bull attacks upwards with its horn and bears downwards with its claws. These terms aren’t used academically, more like market talk; hence, there is no clear definition of the time frame they represent.
They are used for the market cycle (mid to long-term). These cycles reflect countless, economic and social situations. With crypto, the market behaviour is more complex; as a global market, there are more variables to consider to have a bull or bear market cycle.
Charting tools are the best way to estimate the market’s behaviour. Long-term (i.e. weekly charts) will reflect how the market moves and the angle of movement, which generally outlines where we are as a cycle. As for the future where the market could go, that’s the million-dollar question, and there are plenty of people with their opinions. Therefore, doing your own market analysis is essential.
For short-term analysis (mini cycles), the market could move in the opposite direction, i.e. correction during the bull market. This is a natural event as people eventually take profits and cut their losses (plus market manipulation, which will be covered in another post). A commonly used term is ‘buy the dip’ when we have a clear bull cycle with a sudden correction. This won’t be smart when the market is in a bear cycle.
In line with the above, if you plan to be a medium-term trader, you should have basic charting knowledge, i.e., when to read 1hr, 4hr, daily and weekly charts. In addition, show some interest in macroeconomics; some bad news could be a buying opportunity during a bull market or exit in a bear market.
We will cover this topic more comprehensively in the near future.