I think everyone remembers the Doge meme that surfaced and took over Facebook and 4chan during the years 2010-2015. And today, Dogecoin, a cryptocurrency based on the same meme, is making millions.
Cryptocurrency is a digital currency that is the future of the market with the gaining popularity t has gathered over the years. Now, most if not everyone has bought some level of these digital currencies as an investment.
People are treating this market with the same importance as the stock market. And there is a bountiful number of strategies to make money off of the crypto market, yet the basic ones are ‘being bullish’ and ‘being bearish’ in the market.
But what exactly does it mean to be bullish or bearish in the market? Which one is more profitable and which one is a better investment strategy? Let’s talk about that.
Let’s start by talking about how they get their respective names. The phrase ‘Bull and Bear market’ has been around for a very long time. No one knows exactly why these are the specific names given to these strategies, but there is a very plausible explanation.
Bears are referred to as apex predators as they sit on top of their respective food chains, but they are also one of the most strategically smart predators. They have huge claws but don’t jump their prey out of anywhere.
Their main advantages include their weight and the sheer strength they have to tear through their prey. They hide and lurk and find the best time to strike.
Bulls on the other hand use their speed to their advantage by charging on their prey head-on with sharp and powerful horns. Its thrusts are enough to incapacitate their prey and might even kill them with one good thrust and hit.
Bull and Bear markets:
A bull market consists of long strategies and a growing market. Most traders in a bull market hold their securities and sell as soon as they see a peak in the market.
A bear market is the opposite of a bull market, where the prices are falling and selling is encouraged. The traders opt out of the market when it hits a peak, as the prices are bound to fall. They wait till the bear trade is over and come back in.
How to act during these markets?
In a bullish market, the best advantage to be taken on by investors is to adopt a long-term strategy. In this long-term strategy, the investors buy the crypto securities as early as possible when the trend comes in, and sell the security when it reaches its maturity or peak with the highest probability of earning a big return.
In the situation of a bearish market, the chance of earning a loss is pretty high. Because the securities or assets are losing their return capabilities or value with time, and due to this the end of the bearish trend is not in sight.
But if you invest in this time at the market, you incur a loss for a short period before the turning kegs come into play.
In a situation like the bearish market, it is essential to know when the asset or crypto will hit its least downfall before it starts to rise again. Knowing when to buy back after selling these assets is very important.
If sold at the correct time and bought back at the considered lowest point of these assets, the investor can easily earn a good return when the market turns back into a bullish market.
In conclusion, in a crypto market, as compared to a regular securities market, it is more difficult to figure out when the market is acting bearish or bullish as the prices of these securities depend on various factors in the market.
If you can identify the shifting of these markets at an early stage, you can reap the benefits from these securities for a very long time by knowing when to sell and when to buyback.
Written by - Mohammad Arbaz Jalees
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