An Intro to Bull Markets
- Discover the concept of bull markets in the crypto industry and learn how to identify them
- Explore historical bull runs and key indicators
As a trader, it’s important to understand trends in crypto markets. And some of the biggest excitement in the crypto market comes during a bull run.*
A bull market (or bull run) refers to an optimistic outlook on financial markets, with prices rising and expected to rise ever further. People tend to apply a bull market to a price increase by 20%. Particularly for crypto which is often volatile, this term is used for an extended period (months or years) of time in which prices are generally rising. The opposite to a bull market is a bear market, which sees a long period of falling prices, and this quite often takes place after a bull run. **
What bull runs have taken place in the past?
There have been many examples of bull markets in the past, starting with the:
- 2013 bull market: Bitcoin's price rose from around $13 in January to over $1,000 in December, marking a significant surge, attracting widespread attention and laying the foundation for future crypto market developments
- 2017 bull run: The most famous crypto bull market occurred in 2017 when the prices of cryptocurrencies experienced an unprecedented surge. Bitcoin, the leading cryptocurrency, reached an all-time high near $20,000 in December 2017. Other cryptocurrencies like Ethereum, Ripple, and Litecoin also experienced substantial price increases during this period
- 2019 bull market: After the bear market of 2018, cryptocurrencies began to recover in 2019. Bitcoin's price started the year around $3,700 and reached nearly $14,000 by the end of June. This rally marked a resurgence in investor interest and optimism in the crypto market.
- 2020-2021 bull market: In the wake of the COVID-19 pandemic, cryptocurrencies experienced another bull market. Bitcoin's price increased from around $4,000 in March 2020 to an all-time high above $64,000 in April 2021. Ethereum and various altcoins also saw significant price appreciation during this period
- 2021 altcoin bull run: Alongside Bitcoin's rally in 2021, there was also a significant bull market for many altcoins. Cryptocurrencies like Ethereum, Binance Coin, Cardano, and many others experienced substantial price appreciation, driven by factors such as decentralised finance (DeFi) and non-fungible tokens (NFTs)
How can you identify a bull market?
The easiest way to identify a bull market is looking at the price trend, which will show a sustained upward movement in price across a range of different cryptoassets. However, there are multiple factors and indicators, so if you want to undertake an in-depth financial analysis to try and identify a bull market, you can look at:
- Index performance: Examine major market indices, such as the S&P 500 or Dow Jones Industrial Average, and observe if they are consistently reaching new highs over an extended period
- Volume increase: Bull markets are typically accompanied by increased trading volume. Higher trading volumes indicate growing investor confidence and participation in the market
- Market breadth: Assess the breadth of the market by analyzing the number of advancing stocks versus declining stocks. In a bull market, there is generally a higher number of advancing stocks, indicating broad-based market strength
- Economic indicators: Economic indicators such as GDP growth, low unemployment rates, increasing consumer spending, and positive corporate earnings can support a bullish market sentiment.
- Investor sentiment: Positive investor sentiment is often observed during a bull market. Investors exhibit optimism, increased risk appetite, and a belief in the upward trend, which is reflected in surveys, market sentiment indicators, and media coverage
- Technical analysis: Use technical analysis tools, such as moving averages, trend lines, and momentum indicators, to assess the overall market trend. Bull markets often exhibit upward price patterns, higher highs, and higher lows
- Market leadership: Observe the sectors and industries leading the market. In a bull market, sectors like technology, consumer discretionary, and financials often outperform others
- Market corrections: Even in a bull market, there may be occasional market corrections or pullbacks. These temporary declines can provide buying opportunities and help distinguish between short-term fluctuations and a true shift in the overall trend
Nevertheless, it should be remembered that a lot of a bull market is made of up of investor confidence and optimism, which can easily change, meaning that nothing is guaranteed.
*The prices of Cryptoassets fluctuate, sometimes dramatically. The price of a Cryptoasset may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling Cryptoassets.
** The value of cryptoassets may fluctuate significantly over a short period of time. The volatile and unprecedented fluctuations in price may result in significant losses over a short period of time. Any Cryptoassets may decrease in value or lose all its value due to various factors including discovery of wrongful conduct, market manipulation, change to the nature or properties of the Cryptoasset, governmental or regulatory activity, legislative changes, suspension or cessation of support for a Cryptoasset s or other exchanges or service providers, public opinion, or other factors outside of our control. Technical advancements, as well as broader economic and political factors, may cause the value of Cryptoasset s to change significantly over a short period of time.