What are bull markets and bear markets?

December 20, 2023
2 min read
Bulls & bears

Bulls and bears are often seen and named in the crypto market. Bullish and bearish or bull markets and bear markets are used to describe the market trend or sentiment. Why these two animals? And where do these terms come from? In this article, we will give a brief explanation.

The meaning of bull and bear markets

A bull market is a positive market full of optimism among investors. Prices show an upward trend. Bull here stands for the bull that attacks with its horns up. A market cannot keep rising forever. Therefore, at some point during a bull market, a correction, dip or even crash is to be expected.

If this falling market lasts longer, it is called a bear market. A bear market is characterized by pessimism. Prices fall and investors expect even more decline, so they buy less. The name bear here comes from a bear slapping its hind legs down to fight.

It is not entirely clear why bulls and bears were chosen, but these terms are also used in traditional finance. So it is not unique to crypto. In traditional finance there are definitions for the terms, in crypto the terms are often used a lot more loosely. For example, in the stock market, we only talk about a bear market when stock prices fall by more than 20 percent, and it has to be a trend for more than a few months.

Other jargon

There are also some "other markets," although these enjoy less name recognition. One example is a crab market, where prices move mostly sideways and the trend is neither downward nor upward, but the price remains roughly the same. Crypto winter is another common term used to describe the market. In the case of winter, there is a very long bear market that just doesn't seem to end.

Perma bulls or perma bears are investors who are in a constant state of optimism or pessimism. Perma bulls believe the market will continue to rise, and perma bears expect prices to continue to fall, perhaps to zero.

The information provided in our articles is intended solely for general informational purposes and does not constitute (financial) advice.

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