Bull and bear market


What is a bull market?

A bull market is a period in financial markets when the price of an asset or security rises continuously. The commonly accepted definition is when prices rise by 20%, which happens when demand outweighs supply and market confidence is very high. Investors are becoming “bullish” about the price increases further which may trigger the start of a bull market.

Cryptocurrencies are volatile so even during a bull market there will be strong fluctuations and corrections that may be misinterpreted as the end of a bull market. That is why it’s important to use different trend indicators as we use at Moonbit to consider any potential signs of a trend reversal from a broader perspective.

What is a bear market?

A bear market is when a market experiences prolonged price declines. It describes a situation in which prices fall 20% or more from recent highs amid negative investor sentiment. Bear markets can be difficult to trade in particularly for inexperienced traders and even harder for newcomers to cryptocurrencies that invested at the peak of the market. It can be difficult to judge the end of a bear market as rebounding happens slowly while sudden price declines are commonplace.

Why should you care?

Cryptocurrencies are notorious for strong bull and bear markets. If you invested $100 on 17/12/2017 you would have today $166 (10/05/2022). If you had invested exactly one year later that amount would be worth around $850 today. Moonbit algorithms run in real-time to benefit from both bull and bear markets.