Bullish and Bearish Market: Have you recently started investing in the crypto market? If so, as a beginner there are a lot of things for you to learn and understand to trade effectively in cryptocurrency.
One of the terms that you might have come across while studying the crypto market is “bear market” and “bull market”. The terms are crucial for you to understand so that you can make the right trading decision.
Also, knowing about the “bull” or “bear” market position allows you to determine the market sentiment. This will prevent you from falling for FOMO and making the right trading decision. So, after all, what does it mean by “bull market” and “bear market”? How do you invest efficiently in both these market conditions? Let’s see what our experts have to say.
Bull Market: A Brief Overview
In bull market conditions, there is an increase in the prices of assets. This prompts investors to make investments and hold on to their assets.
Bull markets can last for a few months to a few years. During a bull market, more investors are motivated to invest in the market. This creates a market for potential buyers.
Moreover, a bull market indicates that the economy of a country or the world is thriving. There will be lesser unemployment and more opportunities. The overall market sentiment in a bull market is happy and confident.
Bear Market: A Brief Overview
In bear market conditions, there is a decrease in the prices of assets. The investors don’t have enough confidence in the market as the prices keep dropping.
An overall drop of 20%in the prices of assets over 2 months is considered as a bearish market. This market is an uncertain time in the investor journey. They don’t know whether to sell their assets or hold on to them. This period is also known as “FUD” (fear, uncertainty, and doubt).
The overall sentiment of the investors is filled with fear of prices dropping even more.
Ways to invest in the bull market and bear market
- For Bull Market: Investors can make sure to buy crypto coins as early as possible. And you sell them when they reach their peak prices. Don’t make the mistake of selling the coins early. Instead, track the market changes to determine the peak pricing. Also, you can be one of those investors who want to hold their coins long-term.
- For Bear Market: With a lack of confidence, a lot of investors are prompted to sell their crypto coins in the bear market. However, there are a few strategies where you can earn profits even during the bear market.
- Buy the Dip: Bearish market is the best time to buy crypto coins. They are their lowest prices and hence you don’t need to spend more to buy the coins. And you can sell them when the prices are favorable to earn profits.
- Dollar-Cost Averaging: Bearish market is not a good time to spend too much of your funds in a single go. So, several investors like to invest in bit size. They divide their funds into smaller sizes. Invest these smaller-sized funds over some time to average out the purchasing costs.
- Investment Diversification: Bearish market is a great time to diversify your investments and thus your portfolio. Since most crypto coins are at their lowest prices, you can invest in multiple crypto coins. And sell them when they reach peak prices. You can earn massive profits at the right time.
Knowing about bearish and bullish markets gives you an edge to make the right trading decisions. And even if the sentiment of investors is filled with fear during the bearish market, it is still a good time for investors, especially beginners.
So, start trading in the crypto market now. And to know more crypto insights, keep following Coin Informer!