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Bull Market Early or Bear Market Trap?

A more important question for cryptocurrency investors is whether this rally is a resumption of the bull market or a bear market trap

By Bhagirath RoyPublished about a year ago 4 min read
Bull Market Early or Bear Market Trap?
Photo by Shubham Dhage on Unsplash


Financial markets for stocks, bonds and commodities are heavily influenced by consumer confidence. Confidence also increases in bull markets that occur when asset prices rise for a period of time. Investors are looking to buy or hold securities, fueled by a booming economy and low unemployment rates that typically accompany a bull market, creating a buyer's market.

Throughout history, the bulls have made great moves in the US market, beginning with the post-World War II boom surpassing the pre-Depression market peak. Since then, the market has experienced a series of bull markets, including the longest from 2009 to 2019 following the collapse of the US housing market.

Bitcoin's price surged in just over an hour last night. Prices climbed from about $6,800 at the time of the assault to as high as $8,100.

Dollar. It rose nearly 20% on the day. Led by Bitcoin, other cryptocurrencies also embarked on a strong recovery, with individual currencies gaining more than 50%. As the cryptocurrency market surged in unison, many investors claimed that the bull market was back.

According to data from the website Coin Market Cap, Bitcoin's market value increased by nearly $20 billion in his one day, and the cryptocurrency market as a whole also saw overall market growth. There was no "search effect". Billions of incremental funds should hit the market yesterday to replace equity funds after Bitcoin's daily trading volume surpassed $9 billion.

In fact, his Bitfinex, a digital currency trading platform, also saw many purchases during a time when Bitcoin was booming. As bitcoin buying increased, many short sellers were forced to close their positions, adding to the bullishness of the market. His director of data at Cypher Capital, Nick Kirk, also voiced his support for the phenomenon. At the same time, he also believes this strong recovery corresponds to the early lifting of regulatory pressures.

A bull market is fueled by optimism, while a bear market occurs when stock prices drop by 20% or more over an extended period of time, which is the exact opposite. While bull markets are generally driven by economic strength, bear markets often occur during periods of economic slowdown and rising unemployment. Investors want to sell instead of buy in the market, often fleeing to safe cash or fixed income securities. The result is a seller's market.

Bear markets can last from weeks to years. The first and most famous bear market was the Great Depression. Examples include the dot-com bubble of 2000, and he said the housing crisis of 2007-2008.

Pant era Capital Management, one of the world's largest digital currency hedge funds, said Bitcoin has bottomed out. $6,500 is the bottom of the Bitcoin bear market. Bitcoin will continue above this price for most of this year, and may even surpass his $20,000 high.

Unstrap Founder Tom Lee Also Expresses Confidence in Bitcoin

He believes Bitcoin's current P/E ratio and other indicators are about the same as the bear market of late 2014, triggering a significant technical correction. Based on this, Bitcoin's value could more than triple this year, reaching $25,000 by the end of the year, he said.

Historical data show that Bitcoin actually rose in the second quarter of the calendar year. In the second quarter of 2011, Bitcoin showed a staggering rise of 1964% in 2012, 36.25% in 2012, 61.98% in 2016, and 131% in 2017.

Of course, Bitcoin's OTC volume is also showing signs of market recovery. Since March, Bitcoin trading volume has surged to record highs in Canada, Europe, Vietnam, Mexico and Vietnam.

Major financial institutions such as Soros, a major hedge fund, and the Rockefeller family, a top financial group, have entered the market one after another, further expanding the financial scale of the virtual currency market.

As any seasoned investor knows, markets are always in flux. Often it is not due to a bear or bull market

Small gains and losses often offset each other, resulting in a flat market. In addition, short-term trends and market corrections can cause markets to experience significant changes, which can result in downward movements. Bull and bear markets occur over long periods of time. As time went on, the bulls got the upper hand as the stock market showed positive results.

However, it is worth noting that while Bitcoin is currently showing a strong rally, it is still in a downtrend and has yet to effectively break. Whether the cryptocurrency market has actually reversed remains to be seen. Investors should always be vigilant and pay attention to position management.

More importantly, the world's major Bitcoin markets, including the United States, are working to create regulatory frameworks. Regulatory uncertainty should have a greater impact on the near-term development of the cryptocurrency market. In the long run, an orderly and healthy market is likely to develop further.

economyfintechinvestingpersonal financestocks

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