Cryptocurrencies are gaining momentum after each passing day and the price is ever rocketing. But after each halving, the price reaches a stagnant rate, this is when the market is too good to be true. When the crypto market is good, you will hear other investors call it a bull run or bull market. A bull run is best defined as “a strong upward trajectory of price movements”. Some call this a party for investors when the price just goes up and more people just want to join the “fun”.
Bull And Bear Market
There are two types of markets in trading, namely “Bull Market” and the “Bear Market”. A bull market is used to indicate a rising market and a bear market indicates a declining market. The logic behind naming them this way is that
This is termed differently as markets experience day-to-day volatility. These terms are usually used in longer periods of movement, whether up or down.
The price of a cryptocurrency may be influenced by public confidence and a lot of other factors. Similarly, investors who believe the prices of a cryptocurrency will go up are called “bulls”. As this confidence builds up, the user will have the urge to invest more making the price continue rising.
Of course, there will be dips and other fluctuations along the way and it can be easy to misinterpret the short-term downward movements as the end of a bull market. This is why it is important to consider any potential signs of a trend reversal by considering to look at the price action over longer periods of time frames. This trend also does not last forever, sometimes a sharp downward price movement can start a bear market which will be circulated among investors and they will also start selling increasing the downfall.
Let us understand why these different types of markets occur. Usually, the Fear and Greed Index in the investor sentiment is high and there are strong economic conditions in other markets like the stock market. Also, governments are not looking to regulate the industry or blockchain development. There is also no specific period where each market lasts, cause after a point of time, all markets will crash down, but in general, bull markets run for other markets tend to last an average of four years according to historical data.
Strategies That Investors Could Apply
A strategy many investors apply during the bear market is dollar-cost averaging. Here, a person would invest a set amount of money every week or month, whether the asset is rising or falling, and this tallies the risk and allows the investor to invest through both, bull and bear markets, alike.
Usually, the bull run helps boost the prices of cryptocurrencies like Ethereum. Many analysts predict that the next bull run will be shortly after the U. S. Presidential Elections in November 2024, this month. This time, emerging sectors like AI and Real World Assets have the potential for significant gains like Bitcoin, Ethereum, and Solana.
Multiplying Gains
Multiplying your gains with leveraged trading is another to regulate your profit and losses. Leveraged tokens and margin trading are appealing options during a bull market. Leveraged tokens use a rebalancing mechanism that helps maintain the desired leveraged level. This allows traders to borrow funds from an exchange of brokers to increase their trading position’s size.
Options trading is a way to guess the feature direction of the stock market or a company’s security. In this method, options contracts give you the option, whether or not you choose it. The options will be to buy or sell an underlying asset at a predetermined price by a predetermined date.
Using RSI
RSI, Relative Strength Index is used to assess whether a specific asset is overbought or undersold. Crypto is overbought when the RSI is around 70% and underbought if the RSI is under 30%. Another strategy is calculating the moving average, which is the average price of a specific crypto over 20-200 days. If this price is above a long-term moving average, this indicates a bullish upward trend.
Selling By Portions
Another strategy Bitcoin investors use is to sell by portions, they set limit orders in trade so as to not miss out on big profits and not wait for more at the same time. By setting limit orders, it automatically sells the user’s crypto once it reaches the limit set in the market.
From what I understand, it is best to invest with caution as predicting exact returns will be challenging and the market is fluctuating all the time. There isn’t a specific metric to identify a bull market but it is when prices rise by more than 20% for a prolonged period of time. As there isn’t a specific time that the cycle switches from bull to bear market, it is best to opt in between and invest mindfully. As the crypto platform has only received widespread adoption recently, it is impossible to predict how long each market will last.
Bitcoin is still the highest invested and sold in crypto but there are a lot of other cryptocurrencies. In recent bull markets, this dominance dropped and several other cryptocurrencies saw huge rises in prices.
Buying and Holding Indefinitely (HODL)
Buying and holding indefinitely helps avoid Capital Gains Tax on crypto. High capital gains tax bills are the result of high sales. So, it is best to avoid by doing this method. This does not mean you cannot earn from your assets though. There is a huge variety of ways to earn passive income from the crypto market you are holding. These methods include staking, lending, and providing liquidity.
When to Buy in Bull?
It is difficult to estimate when the market is going up or down so the best idea would be to buy early in the crypto market. We’ve all seen the crypto market and know that it is not going down, it only fluctuates from time to time but the technical indicators and the market sentiment are at all-time highs, so it is best to buy at the earliest. The sooner you buy in the bull run, the higher you can sell for.
Setting Up a Trading Plan & How Much To Risk?
A correct trading plan does not exist. Trading plans have to be made based on your plan if the trading plan relies on the technical analysis of the investor. The switch relies on how you regulate and control your stop losses and not risk everything in a single position. There is no limit to how much to risk either. Again, this depends on your financial stability in trade and how you stop loss before it exceeds the limit.
Things to Consider While Trading
All bull markets come to an end, at one point or another. So, while trading in bull markets, it is important to have an exit strategy as well. This will vary for each trader. They have to ensure that there is at least the initial investment back by the end of the bull run and that they have different assets for the future.
Investors have to keep on learning the trade as the patterns and strategies keep on changing and they have to keep up with it for maximum profit. You have to take advantage of technology as there will be people and information that will be beneficial to users hidden here and there. Once you think you have collected enough information, you have to develop a factual conclusion as to what works for you and what works in general.
Investors have to protect their capital and not risk more than they can afford to lose, especially trading in NIFTY FIFTY INDEX and other currencies. The basic and only strategy all should follow is to “plan your trade and trade your plan”. People have to also be cautious to keep their losses minimum.
You always have to keep trading like it’s a business. Businesses are give and take, treat your losses that way too, but to a limit. One should never consider trading as a hobby, there will not be a truthful commitment to trading if it is a hobby, rather if treated as one. When trading is analyzed as a business, it helps to clearly identify all expenses and losses. This, in turn, helps reduce risk and stress. This shouldn’t be viewed as a business for prediction though, this will only be a trial and error trade and it won’t be for good.
While currencies like Bitcoin may provide good returns, the real opportunities are there in other altcoins that have the capability to outperform the market. By regulating the predicated start and end dates of the bull run and considering the projected total market cap. Investors have to always look out for margin gaps and the graph going up and down.
It is always good to use stop loss in trade as it is a predetermined amount of risk that a trader is willing to accept with each trade. A stop loss could be in the form of money or percentage. It reduces stress and prevents the trader from losing more. Exiting with a stop loss and a losing trade is still good trading if it falls within your trading plan rules.
Just like how a trader knows when to start trading, it is also important to know when to stop. An ineffective trading plan shows greater losses than thought. Markets may have changed more than the trader might have anticipated and not planning the trade will only create a downfall.
A trader who makes a plan to trade and does not follow it due to poor habits or stress could cause even more loss. It is better to take breaks when traders are having issues that could affect their trade. They can return after they have dealt with the issues and have resolved them.
Always focus on the positive side of trading. A person who loses a trade is considered as someone who is still learning and it is okay to lose. A winning trade is just one step to a profitable business. Cumulative profits create a profitable trade in the future. Emotions do not stand a chance in trading, the sooner a person understands that, the better. It also reduces performance.
Pay attention to risk and minimize the loss of capital- that must be the aim. Losses will occur without warning, the only thing a trader can do is to regulate the losses and eventually pick it back up.
Conclusion
In conclusion, the net crypto bull run has massive potential for investors who want to make a huge amount of money. With the strategies given in this article and by learning more every day, it is possible that you can earn a decent amount of money every day. Based on your strategy and your own timing and comfort, if you plan the trade and set a limit after which you won’t risk losing, all will be well.
When taking advice from investors you watch on YouTube, check whether they are verified users and look for genuine comments. Always stay informed on the latest trends and ups and downs, and also be aware of other investors’ strategies as well.
You never know when all these tips that you see coils be useful to you. No matter what, it is always essential to look for new information regarding the coins or trades you are investing in and keep learning. Reinvent yourself by knowing more on platforms like YouTube as there are a lot of creators who talk about crypto and tips on how to regulate losses. With a strategic approach and thorough knowledge, investors could maximize profits and regulate losses.
It is important to be optimistic but with caution. As the next bull approaches, investors should not miss an opportunity to implement what new they have learned. Maybe if you are well equipped with strategies and knowledge about crypto, you could also turn the profession from an investor to a full-time content creator on several platforms, helping more people. Good luck!