What Are The Signs Of A Bull Run In Crypto?

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A crypto bull run is considered the best option for traders. And like a bull to a red rag, you should run to it. But what does that mean? Well, a bull run refers to a prolonged period of time during which the price of a financial asset, like a cryptocurrency, stock, or index, experiences sustained upward momentum. In the crypto world, that means that anything from the Bitcoin Price to the Fantom Price would be gaining traction.

This is very promising to the trader and will indicate a good investment. During a bull run, traders aim to buy and hold assets to benefit from the sustained upward trajectory. However, bull runs eventually peak and reverse into bearish declines, therefore the timing of this turn is important and challenging.

But the important part is spotting a bull run in the first place. How do you know you’re looking at a bull run crypto coin? We are looking at the indicators that show you a coin is a bull run.

The bull versus the bear

Before we understand the signs of a bull run, we should determine some terminology. Why are we talking about bulls when looking at financial markets?  

What is the bull and the bear in crypto trading? These two ideas refer to an overall look and idea of the sentiments of a given financial market. For a coin, for example, to be bullish, or “bull headed” is an optimistic sentiment. It means that the stock or coin is charging upwards. Technical analysis shows a market is bullish when prices are in an upward trend, making higher swing highs and higher swing lows. Additionally, bullish investors and traders will buy assets, go long, or hold assets expecting values to rise.

The bull versus the bear

The bear is the complete opposite. A bearish coin is one that is expected to decline in the future. The term comes from the idea of bears swiping down in an attack with their paws. All of this amounts to a rather pessimistic viewpoint. In this instance, technical analysis shows a bearish trend when prices are moving downward, making lower swing highs and lower swing lows. Bearish traders will sell assets, go short, or avoid markets expecting values to fall further.

Knowing the overall market sentiment allows traders to keep informed about future trading strategies and their next step forward.

So, what are these strategies? What are the best indicators to keep an eye on to spot a bull run?

Increased trading volume

Increased trading volume is the most obvious bull run indicator because it reflects growing interest or participation in the crypto market. When more people are buying and selling crypto, trading volumes go up, causing prices to start rising. High volumes suggest positive sentiment and appetite for crypto. The influx of new money and more buying activity helps propel prices upwards.

Price reaches new highs

Price reaches new highs

People always want to be a part of a good thing, so, during a bull run, crypto prices will consistently reach new all-time highs or cycle highs as demand drives prices up. For example, people might see Bitcoin hitting $50k, and that alone might spark more buying and push it to $60k.

Mainstream media coverage

In turn, records like this might reach headlines. Sometimes this will be only included in the finance section, and sometimes they are noteworthy enough to make the front pages. Bull runs are often accompanied by increased mainstream media coverage as cryptocurrencies gain more attention. This is naturally going to further drive up prices. Keep an eye on the news for any crypto coins that keep coming up in conversation.

New money entering

As mentioned, a bull run is often fuelled by an influx of new capital into the crypto space, from both retail and institutional investors. Cryptocurrency spreads to new groups like millennials, emerging markets, traditional finance professionals, etc., bringing in fresh capital. When new investors and institutional money start flowing into crypto, it signals growing adoption and helps propel prices upwards. And let’s not forget the impressive power of FOMO: Fear of Missing Out. No one wants to miss the upside, so more rush to the coin.

ICO hype

ICO hype

Bull runs are sometimes preceded by hype around Initial Coin Offerings (ICOs) or new blockchain projects that generate excitement. This speculation can boost prices. Early ICO investors can make incredible returns, fuelling anecdotes of instant crypto wealth which draws in more money. This mania sends crypto market caps swelling as billions pour into hyped up projects with no working products.

Optimistic sentiment

As the term suggests, during bull runs, sentiment is overwhelmingly optimistic. Experts make bullish predictions calling for new highs and the fear of missing out kicks in for many. Additionally, positive sentiment can reach euphoric levels, as people get caught up in herd-like optimism, throwing caution aside. It’s something of a self-fulfilling prophecy in that if things look optimistic, then they will be.

Conclusion

However, it’s important to remember that bull runs are often followed by bear markets with falling prices. It's difficult to predict the tops and bottoms of cycles or when sentiment may shift. The crypto market remains volatile and it’s important to keep this in mind when you are making financial decisions.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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