How to recognize a bearish trend and a bullish market: a practical guide for traders

The Two Sides of the Cryptocurrency Market

Anyone who has ever looked at a cryptocurrency chart knows: prices don’t rise forever. The market breathes — sometimes going up, sometimes falling down. Professionals call these waves bullish and bearish periods, and understanding their mechanics is the foundation for earning profits, not losses.

When the Bulls Take Control: Signs of an Uptrend

Bull market is not just a few percent increase in quotes. It’s a multi-month or even multi-year period when crypto assets steadily appreciate by 20% and more. During such times, capitalization expands, trading volumes skyrocket, and positive headlines about regulatory approvals or new institutional investors constantly appear in the news.

What does this look like in reality? In 2020–2021, Bitcoin made an incredible jump: from $10 000 to $69 000. People literally saw money on their screens and rushed to buy. Investor optimism was so strong that even bad news couldn’t stop the growth.

What to watch for during a bullish trend:

• Prices regularly hit new highs
• Queues of newcomers want to enter the market on exchanges
• Media writes about “blockchain revolution” and “the future of finance”
• Even trading volumes grow — indicating real demand, not just fantasies

When the Bears Take Over: Signals of a Falling Market

Bear trend is the opposite scenario. Prices fall by 20% or more from peaks, people panic and rush to sell at a loss, fearing even greater losses. Fear and uncertainty dominate the market.

A classic example: 2018. Bitcoin plummeted from $20 000 to $3 000 in a few months. Those who bought at the top lost 85% of their capital. It was a true bear market, where no positive news could stop the bleeding.

How to recognize a bear market:

• Charts show a series of new lows
• Trading volumes decline — people have nothing to buy, everyone wants to sell
• The news background becomes threatening: bans, regulatory checks, scandals
• Investors start transferring funds into stablecoins, forgetting about growth

Psychology vs. Mathematics: Why Does This Happen

The difference between these two markets is not only in numbers. It’s a battle of psychology. In a bull market, people believe that everything is just beginning and fear missing out on profits. In a bear market — they fear losses and rush to exit at any cost. It’s this emotional wave that drives prices as strongly as fundamental factors.

How to Profit in Different Conditions

When the bulls are in control (bullish market):

• Just buy and hold (HODL) — the most boring but often most profitable strategy
• Buy on dips, sell at peaks if you are an active trader
• Long-term investments in promising crypto projects

When the bears strike (bearish trend):

• Shorting — sell high, buy low when prices fall
• Transfer part of your portfolio into stablecoins and wait for the bottom
• Diversify your funds across different assets to avoid losing everything on one

How to Spot a Reversal in Time

The market doesn’t turn around instantly. There are signals indicating upcoming changes:

Before an upward movement begins:

• Prices stop falling but haven’t started rising yet (flat at low volumes)
• Positive news about blockchain development begins to appear
• Large players (whales) start buying assets cheaply
• Technical analysis lines show a reversal upward

Before a bearish trend starts:

• After a long rise, prices begin to make increasingly larger pullbacks
• Trading volumes decrease, even though news remains positive
• Scandals, regulatory checks, or economic shocks begin
• The chart shows a series of “false breakouts” upward

How Long Does It Last

Crypto bull markets usually last 1–3 years, gradually gaining strength. Bear trends, on the other hand, can last from several months to 1.5–2 years — a painful process of waiting for the bottom.

Practical Advice for All Times

Regardless of the current trend, one rule applies: analyze the market, don’t believe rumors, diversify your portfolio, and never invest more than you’re willing to lose. A bull market offers opportunities to profit from growth, while a bear requires composure and preparation. But both are normal parts of financial cycles.

Questions Everyone Asks

Can you make money in a bear market? Yes, but it requires knowledge. Shorting, trading stablecoins, finding anti-correlated assets — all work if you don’t panic.

How to tell if a bear trend has ended? Look for a combination of factors: a technical reversal pattern on the chart, recovery of trading volumes, and a shift in news tone from negative to neutral.

Should I trade or invest? If you’re not an experienced trader, it’s better to choose long-term investing in promising projects. This allows you to weather bear trends and enjoy bull markets without stress.