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What is a Bear and Bull Market?

In financial markets, different terms are used to express the trends of investors. The words "bear market" and "bull market", which are often used in crypto money markets, are at the beginning of these terms. What is a bear market, what is a bull market? We will explain such questions in detail in the rest of our article.


What is a Bull Market?


For bullish situations seen in asset movements, the term bullish is used. A bull market can be thought of as an uptrend in asset prices. In bull markets, economic growth has started and a rapid rise is observed.


A bull market is a market where investors' confidence in cryptocurrencies increases. Investors have optimistic expectations for the future and increase their investments by taking more risks. Examples of investor behavior in a bull market are long-term investments, demanding low-priced assets, and diversification of portfolios. As an example of the market, after the Second World War, the rapid growth of the US economy can be considered.


What is a Bear Market?


Situations where there are contractions in the market and the investor is in a pessimistic mood are generally defined as bearish. The bear has been transformed into a metaphor by the way it attacks its victim and is therefore used as a stock market term. In a bear market, there are pessimistic expectations about the future and the market is in a downtrend for a long time. The main feature of the bear market is shown as high decreases in asset prices. Economic recessions cause fewer investors to trade in the market and pessimistic expectations. However, analysts state that in the bear market, there can be a buying opportunity for investors with the right analysis and follow-up.


How Long Does a Bear and Bull Market Last?


Those who trade in the crypto money market should do their market analysis correctly and steer their investments cautiously in bear and bull markets. How long this process will take may vary depending on the structure of the market.


What to Do in a Bear Market?


A bear market is a market in which sellers dominate and cause downward prices in the market they are in. Its separate market is known as bearish market in English. Prices move along the downtrend and bulls (buyers) do not create continuity with momentary rises. In other words, the upward movement cannot be sustained and the asset continues to price its price during the downtrend without spoiling the image. So, how should the investor who wants to protect his crypto money in the bear market follow?


Investing in a bear market is twice as difficult as in a bull market. The investor can easily think that the trend is returning in the instant rises, taking into account the past references. However, on the contrary, it is more difficult for the investor to accept that the direction in the market is up. Therefore, sellers establish stronger dominance in the market. The investor, who is convinced early, realizes his transactions in the sales-dominated market and perhaps has signed a long wait.


It is useful to proceed with technical analysis in a bear market, you should use the right points to determine your trend line or channel, and determine your area well by identifying the region where it starts to fall. If the prices are in a channel, you can create your trading area by taking strength from the channel support and resistance. In such cases, prices move within a certain band gap. We can call this episode the stubbornness of the bulls and bears. Bearish dominance at resistances and bullish dominance at supports are clearly felt. The trader also tries to get the maximum benefit from this area.


Investor can evaluate the bear market in two ways other than taking advantage of trading areas. The first is the method of reducing cost by buying at lower levels as the market recedes. It is the path followed by the investor who buys especially with the thought that the prices will rise, or the investor who makes "hodl". Another method is the path followed by the investor whose position is profitable. In this case, the investor is willing to buy from a lower position by closing the profit position. Thus, he buys again in the withdrawal and can easily benefit from the trade area formed in between. In both cases, the investor can protect himself.