What is a Crypto Bull Market?
5 mins read
5 mths ago
If not for anything, every crypto enthusiast and investor like the bull market because of how easy it is to make a profit during this period. Even those who are just getting started in the crypto space stand the chance of making huge profits during those times.
However, despite the increased chance of making money during the bull season, the crypto market is still volatile. Your ability to identify the right crypto or project to invest in and knowing when to take both your profit and your capital is very important to make money during this period.
Below, you will be learning the essential information you need to know about the bull market and how to make profits during the season.
Bull Market Definition
For most people, the definition they have of the bull market mostly revolves around the fact that it is the period of time when most crypto investors make a lot of money.
While this is correct, it is still important to know what is a bull market in all aspects. One is that it helps you know beforehand when the crypto market is about to enter into the bull season and helps you identify a crypto project that showed its real utility during the bear market.
The bull market definition is simply that period in the crypto market when there is a positive trend in the prices of the cryptocurrencies in the market. For a more technical definition, the bull market is a period in the market when the price of cryptocurrencies increase to more than 20 per cent of what it used to be initially.
The bull market does not only apply to cryptocurrencies. Before the emergence of cryptocurrencies, it was used in the traditional stock market to show a resurgence of financial assets.
Bear vs Bull Market
It is so important to analyse the difference between the bear and bull market to help you further understand what is a bull market. The bear market is characterised by pessimism and it is that period of time when the prices of cryptocurrencies reach their lowest levels. In some cases, there are some crypto projects that die out due to the bear market, as witnessed in the case of Terra.
It is quite a contrast when you compare it to the bull market because it is that point in the market when people are optimistic about cryptocurrency prices. New crypto projects are launched during this time and other technologies that function under the blockchain, such as the NFT industry flourish.
Just as the bull market is characterized by prices of cryptocurrencies increasing to more than 20 per cent or more of what they used to be, the bear market is also characterised by cryptocurrency prices decreasing to 20 per cent or more of what they used to be.
The reverse is the case for a bear market. In economic terms, there is a tendency for many people to lose the jobs they had due to the closing down of crypto companies that existed. Web 3 developers, software engineers, and many other people lose their jobs due to this, as seen during the crypto market crash of 2022.
Strategies to make more money during the bull market
During the crypto bull market, here are some strategies for traders on how to manage a profitable crypto portfolio within the bull season.
Invest in Quality Projects With Real Utility
One of the mistakes that people make during the bull market is that they invest in any project or cryptocurrency they see without checking if it has a real utility.
Of course, the developers of cryptocurrencies will always claim that it has one utility or the other, but it is left to you as an investor to do your research and invest in the right project. Don't waste your funds buying projects that will die off after the bull season ends such as shitcoins.
Invest In Promising Technology
If you want to make more money during the bull market, some part of your capital should go into cryptocurrencies with promising technologies.
Investors are too busy investing in well-known cryptocurrencies that they fail to pick out those that will increase very much in value in the future. Most of the time, cryptocurrencies with technologies that are capable of replacing the fiat and traditional banking system should be considered.
Diversify your portfolio
One of the mistakes that newbie crypto investors make during the bull market is that they tend to invest most of the funds they have into one crypto project.
This might not be the best strategy because if things don't go as planned with the cryptocurrency you invested in, you stand the risk of losing all your money. Rather than investing in one crypto project, look for three or more cryptocurrencies with real-life uses and then split your capital around them.
Use the dollar-cost averaging strategy
The dollar-cost averaging strategy is a situation where one doesn't invest all their money immediately rather, they invest at intervals.
This means during the crypto bull market, if you have about $10,000 to invest, you are not going to invest all of them immediately. Rather you split the money into ten and then invest at regular intervals, maybe weekly, or monthly.
It is important to know what is a bull market because it is that period of time when the most money is made in the crypto market. It is a season where the prices of the majority of the cryptocurrencies increase by 20 per cent or more. With the strategies that are listed above, such as using dollar-cost averaging, investing in quality crypto projects, and others, you can make big money during the bull seasons.
Disclaimer: This article is meant to provide general guidance and understanding of cryptocurrency and the Blockchain network. It’s not an exhaustive list and should not be taken as financial advice. Yellow Card Academy is not responsible for your investment decisions.