You’ve probably heard of – or even seen – a charging bull. Just like this bold animal in action, a bull market pushes forward with momentum. Let’s take a closer look at bull markets and what they mean for crypto holders.
Bull and Bear Market Definition
Bull market meaning: The definition of a bull market is a 20% or greater increase in the market’s relative value. Bull markets tend to occur when there’s a great deal of confidence in the market overall, with price increases and corresponding increases in market indices. In a bullish market, you’ll see an increase in the number of transactions, as well.
Bear market meaning: A bear market is the opposite of a bull market. In a bear market, prices plummet by 20% or more. Lower confidence, lower trade volumes, and continuing lower prices indicate bearish market trends. Stagnation can be a sign of a bear market too.
The Longest Bull Market in History
Using S&P as an example, the longest bull market took place between December 4,1987 and March 24, 2000. It lasted 149.8 months and represented a 582.15 percent increase. For the cryptocurrency market, which typically follows Bitcoin prices, the 8-month bull market that took place between April and December of 2017 was most impressive. A long trend toward bearishness followed, lasting through the beginning of 2019, when we finally saw an uptick and a trend toward more bullishness.
Secular Bear and Bull Markets
Now that you know more about bull and bear market trends in general, let’s take a closer look at the difference between a regular bull market and a secular bull market, and vice versa.
Where bull markets encompass a single 20% increase and last so long as the overall trend never declines into bear market territory, a secular bull market is a longer-term trend. Secular bull markets encompass multiple bull and bear market cycles. Historians point toward the secular bull market that occurred between 1983 and 2000 when inflation finally lost its grip on the United States. It’s worth noting that the October 1987 Black Monday market crash happened during this secular bull market; on that day, stocks took the deepest dive ever. While there are certainly setbacks that take place during a secular bull market, there’s an overall trend toward progress.
Just like secular bull markets cover a long-term period with multiple bull and bear markets, secular bear markets can include shorter bull market trends while showing an overall downward slope. The period between 1966 and 1982 was the longest secular bear market in recent history, and it was compounded by inflation.
Cryptocurrency hasn’t been around long enough to experience this type of extended, secular market trend, but standard advice toward focusing on getting the best possible value for your money, avoiding wipe-out, and making smart trades during natural highs and lows that occur all throughout the market cycle certainly applies. Protect yourself by speaking with an investment expert before making major decisions, whether you’re working within the cryptocurrency market or trading on a traditional exchange.