What is the difference between bull and bear market trade? (Part 1)
Compared to other financial markets, the cryptocurrency market is associated with many fluctuations, and at any moment there is a possibility that we will see incredible jumps and falls with the publication of a news and even with the tweet of an influential figure; But this issue should not be our concern; Because the market of these currencies is bilateral. The meaning of the two-sidedness of the digital currency market is that you can profit from both its uptrends and its downtrends; So it is wise to be prepared for both bullish and bearish scenarios in order to maximize our profit opportunities.
One of the interesting features of the cryptocurrency market is the high correlation between Bitcoin and the entire market. Experience has shown that whenever Bitcoin goes up, almost all altcoins go up and vice versa. In fact, in the cryptocurrency market, all eyes are on Bitcoin, and such excessive dependence on a specific asset is rarely seen in other markets. This issue distinguishes the cryptocurrency market from traditional markets and increases the importance of understanding the mechanism of this market even more.
Activity in asset markets never stops and transactions in these markets are continuously taking place. In the meantime, price fluctuations always happen and markets enter ascending and descending phases.
When the prices increase continuously for a long period of time, we can say that we are facing a bull or bull market.
The reason for naming the bull market as “bull market” is not very clear; But most people believe that this term refers to the way a bull attacks by raising its horns. These types of markets may continue for months or even years, and the exact date of this period cannot be recognized except when it ends.
One of the main characteristics of bull markets, in addition to rising prices, is increasing investor confidence. In such markets, investors are optimistic about the future of prices and believe that the price will go up.