Investors’ general sentiment is categorized in three main segments, namely stagnant, bearish, or bullish. In this article, we’ll focus on bear and bull markets, which happen when investors’ sentiment is positive, or negative, for an extended period of time. Read on to find out all you need to know about these terms, their origins, traits, and what they mean for investors.

About Market Sentiments And General Directions

First off, let’s have a word about what market sentiment and general price direction mean. A market sentiment refers to investors’ general outlook about the potential short-term price development, as well as their level of confidence about the fundamentals of a certain asset class. 

With all that considered, investors’ sentiment can be stagnant for a neutral approach, bearish for a negative outlook, and bullish for a confident, positive mindset. It’s important to note that investor sentiment can change by the day, and that this sentiment needs to remain a certain way for an extended period to have a significant impact on the market in general. The longer crypto investors keep one sentiment the more effect they can have on the general direction of the market. A great indicator for such sentiment is called the Crypto Fear and Greed Index which dynamically rates investor sentiment from 1-100, with the higher numbers being positive, and the lower levels being negative.

What Is a Bull Market?

With that said, let’s see what a bull market really is. Its name originates from the early days of modern investing and features the bull because of its strength, as well as the way it attacks its target, that is, raking it up with its horns.

We talk about a bull market when investor sentiment remains positive for an extended period of time, and prices perform outstandingly, too. These elements need to be present for a few weeks at least, however, the longer they last, the stronger the market’s direction becomes.

What To Do During a Bull Market?

Prices tend to rise during a bull market which means that opening long positions could be an optimal choice for most crypto assets. Needless to say, there will be dips and price down trends during a bull market, too, so doing appropriate research and analysis is still necessary.

What Is a Bear Market?

On the other hand, the term bear market comes from the way a powerful bear charges at its target, that is, swooping it down with its paws and claws. 

Naturally, we talk about a bear market when prices and investor sentiment are trending downwards for a longer period. Just like with a bull market, such a trend needs to remain for a few weeks at least in order to confirm a bear market. 

What To Do During a Bear Market?

Since prices are expected to fall during a bear market, at least in the short run, investors should focus on their goals and decide whether they are prepared to wait out the downtrend and extend their portfolios with assets at lower prices, or to keep their existing tokens and simply wait for prices to rebound.

Ending Remarks

Be it a bear or bull market, it can be beneficial to know what these market conditions are all about. There is no blueprint for success, but expanding one’s knowledge and using it to understand the way prices and sentiments change is as close as it gets.