How to invest in bullish and bearish markets?
#cryptohopper config#crypto trading#crypto trading tips+2 more tags

How to invest in bullish and bearish markets?

If you’re investing in crypto markets, you may have come across the terms “bull market” and “bear market”. The terms “bull” and “bear” are benchmarks used in financial markets to assess whether the market is appreciating (i.e., going up) or depreciating (i.e., going down). An appreciating market is a bull market, while a depreciating market is a bear market.

If you are a new investor and just started trading, then it is important to understand the concepts of the bullish and bearish market as a way to gauge market sentiment.

What is a bullish market?

In a bullish market, prices continuously increase and the market conditions are favorable for the investor.

A bull market may last for a few months or even years. As the investment prices rise and are sustained over a period of time, investors’ confidence is boosted and they become more optimistic.

Investors in a bullish market are commonly referred to as bull or bullish investors. In a bullish market, there is less unemployment and the economy is thriving, which propels investors to buy or hold on to assets, thus creating a buyer’s market.

bullish market
bullish market

What is a bearish market?

Contrary to a bullish market, a bearish or bear market has a downtrend where the market prices are continuously dropping, which generates a lack of investor confidence.

A bearish market is typically noted by a 20% fall in asset prices over a prolonged period of time, usually more than 2 months. During this period, investors are fearful and apprehensive, as they don’t know whether to hold on to the assets or sell them. These feelings are also known as a “bearish sentiment” and are sometimes referred to as “FUD” (fear, uncertainty, and doubt). With a bearish sentiment, the investor fears that the market prices are going to dip or take a significant downturn in the future.

bearish market
bearish market

How to invest in a bullish and bearish market?

The best strategy to maximize profits in a bullish market is to buy crypto assets as early as possible and sell them when the prices reach their peak.

Some people prefer to sell the assets just before the prices reach their peak because they fear that the prices may suddenly fall to mark the beginning of a bearish market.

On the other hand, while some investors prefer to sell assets when the prices reach their optimum value, there are others who like to ride the trend and hold coins over the long-term.

In a bearish market, there is generally a lot of pessimism, but if you use the right strategies there are ways to earn profits even in downtrends.

One of the strategies often used by crypto traders is “buy the dip”.

When there is a significant bearish trend, many buyers buy cryptocurrencies and wait for a favorable time when the crypto prices are high and make huge profits.

Another significant strategy is DCA or “dollar-cost averaging”. Here, the investor breaks their funds into smaller trade sizes. Instead of buying all the assets in one go, they make smaller investments over time to average out the cost of purchase.

Another way is to diversify the investments into different cryptocurrencies.

Do some research and look into the overall performance of the crypto coins and invest in them dilligently. Investors often sell the borrowed crypto assets at a high price and then buy them back at a low price.

Bottom line

The crypto market is highly volatile. It’s important to keep your emotions under control.

It does not matter whether it is a bullish or bearish market - don’t let your fear or greed get in the way of a long-term plan.

Study the market. Consult with a financial advisor and, draw out a strategic plan and, an investment portfolio and decide how and where to invest.

There are free investment calculators and trading tools which can help you with your investment decisions. Most importantly, keep your head cool no matter what happens and prepare yourself for the future.

Inbox Image


Get the weekly email with exclusive crypto analyses and news worth reading. Stay informed and entertained, for free.

Related Articles

Bot Trading 101 | How To Apply a Scalping Strategy
#Automated trading strategy#Strategy designer#EMA+3 more tags

Bot Trading 101 | How To Apply a Scalping Strategy

Cryptocurrencies | BTC vs. USDT As Quote Currency
#Bitcoin#crypto trading#crypto trading tips+2 more tags

Cryptocurrencies | BTC vs. USDT As Quote Currency

Technical Analysis 101 | What Are the 4 Types of Indicators?

Technical Analysis 101 | What Are the 4 Types of Indicators?

Bot Trading 101 | The 9 Best Trading Bot Tips of 2023
#crypto trading#trading bot#crypto trading tips+2 more tags

Bot Trading 101 | The 9 Best Trading Bot Tips of 2023

Start trading with Cryptohopper for free!

Free to use - no credit card required

Let's get started
Cryptohopper appCryptohopper app

Disclaimer: Cryptohopper is not a regulated entity. Cryptocurrency bot trading involves substantial risks, and past performance is not indicative of future results. The profits shown in product screenshots are for illustrative purposes and may be exaggerated. Only engage in bot trading if you possess sufficient knowledge or seek guidance from a qualified financial advisor. Under no circumstances shall Cryptohopper accept any liability to any person or entity for (a) any loss or damage, in whole or in part, caused by, arising out of, or in connection with transactions involving our software or (b) any direct, indirect, special, consequential, or incidental damages. Please note that the content available on the Cryptohopper social trading platform is generated by members of the Cryptohopper community and does not constitute advice or recommendations from Cryptohopper or on its behalf. Profits shown on the Markteplace are not indicative of future results. By using Cryptohopper's services, you acknowledge and accept the inherent risks involved in cryptocurrency trading and agree to hold Cryptohopper harmless from any liabilities or losses incurred. It is essential to review and understand our Terms of Service and Risk Disclosure Policy before using our software or engaging in any trading activities. Please consult legal and financial professionals for personalized advice based on your specific circumstances.

©2017 - 2024 Copyright by Cryptohopper™ - All rights reserved.