Bear market and bull trend: how the two poles of crypto trading work

Throughout the history of cryptocurrencies, investors have faced two opposing market conditions. One brings profits to optimists, while the other forces experienced traders to recalculate their portfolios. These two states — bullish and bearish trends — determine who makes money and who loses. Let’s understand how they arise, how they differ, and how not to get lost in these waves.

The Ascending Phase: When Bulls Rule the Market

A bullish market in cryptocurrencies is a period when prices steadily rise, and the news background is bright and positive. It’s not a one-time jump but a sustained upward movement that can last months or even years.

During a bullish trend, the following occurs: new investors flood into the market, trading volumes soar, and exchanges experience a surge of buyers. People talk about profits, create portfolios, and believe in the future of blockchain. Market capitalization grows, liquidity increases, and even lesser-known projects attract attention.

In 2020–2021, Bitcoin demonstrated one of the most powerful bullish markets in crypto history: its price rose from $10 000 to a peak of $69 000. During this period, institutional investors officially entered the cryptocurrency space, futures appeared, and the very idea of decentralized assets gained a new status.

Key signs of a bullish market:

• Prices grow steadily, with a 20% or more increase
• Influx of new participants and active buying
• Positive events: launches of updates, regulatory approvals, corporate investments
• Active trading, narrowing spreads, deep order books

The Declining Phase: Understanding a Bear Market

A bear market in cryptocurrencies occurs when prices decline over a long period, investors lose confidence, and mass sell-offs happen. It’s a period when fear becomes stronger than hope.

In a bear market, the opposite occurs: people rush to sell before losing even more. Trading volumes fall, but sales remain aggressive. The news background turns grim: regulators impose restrictions, major projects go bankrupt, and the economy slows down. The market loses fresh blood and stabilizes at low levels.

In 2018, Bitcoin fell from a peak of $20 000 to $3 000 — a classic bear phase that lasted over a year and made many traders rethink their strategies.

What happens in a bear market:

• Prices fall by 20% or more from highs
• Waves of panic and despair: investors exit positions at any cost
• Negative news background: bans, crises, scandals
• Trading quiets down, fewer participants, spreads widen

How to Distinguish Between the Two Market Conditions

How to Trade and Invest in Different Conditions

In an Upward Trend:

1. Long-term investing — buy cryptocurrencies with a view to holding for many years
2. HODL strategy — hold assets despite temporary dips and fluctuations
3. Wave trading — buy on local lows, sell at new peaks

During a Bear Market:

1. Shorting — sell assets with the intention to buy them back cheaper
2. Capital preservation — transfer funds to stablecoins and fiat
3. Asset diversification — do not concentrate investments; spread risk across different assets

How to Determine When the Market Changes Direction

The exact reversal point never coincides with an announcement, but there are signals:

Signs of the beginning of an upward phase:

• Growing interest in cryptocurrencies: media reports positively, people discuss on social media
• The chart turns upward after a prolonged decline
• Trading volumes increase amid buying activity
• News about support from major investors and corporations

Signs of the start of a bear market:

• A rebound is followed by a sharp drop, new highs are no longer created
• Waves of selling look panicked, people exit the market
• Trading volumes decrease, interest wanes
• Regulators take strict measures, projects shut down, trust fluctuates

How Long Do These Periods Last

Timeframes depend on how strong the movement is and what caused it:

• Bullish periods typically last 1–3 years
• Bear markets can last from several months up to 1.5–2 years

But in crypto, everything moves faster than on traditional markets, so periods can be shorter.

Frequently Asked Questions

Is it possible to make money during a bear market? Yes. Use shorting, invest in stablecoins, buy top projects at a discount, knowing that the market will eventually recover.

How to tell if the market has reversed? Analyze (support and resistance) levels, monitor trading volumes, pay attention to news and actions of institutional investors.

Why does a bull market last longer than a bear? In an upward trend, people believe in the future and patiently hold their positions. In a bear market, panic works faster — everyone wants to exit simultaneously.

Summary

Bull and bear cycles are not enemies but teachers. Each offers opportunities if you’re ready to act correctly. A bear market teaches discipline and strategic thinking, while an upward trend rewards courage and conviction. Study charts, diversify your portfolio, and remember: cryptocurrency history shows that every bear is eventually replaced by a bull.