Bull and Bear Markets

A market cycle in crypto is simply the alternation between prolonged uptrends called bull markets and prolonged downtrends called bear markets, and knowing how to spot each phase helps you act with less emotion and more method. A bull market shows sustained rising prices, rising market capitalization, growing trading volume, more active addresses on the network, and positive sentiment among traders and institutions. You will also often see more adoption of new technology and friendlier regulation during a bull period. A bear market shows the opposite: sustained price declines, falling market cap, thinner trading volume, fewer new users, negative sentiment, and sometimes tighter regulation and weaker macro conditions. Traders sometimes use rules of thumb to classify phases, such as a defined percentage drop to mark a bear market and higher highs and lows versus lower highs and lows on price charts to mark bulls and bears. Technical indicators that help are moving average crossovers, relative strength index, and trend lines. On-chain metrics to watch include active addresses, transaction volumes, and net flows to exchanges. Derivatives data like open interest and funding rates can reveal hidden leverage that fuels rallies or accelerates crashes. Macro signals matter too; rising interest rates and recession risk tend to make speculative assets less attractive, while easy liquidity and growth spur risk taking. Sentiment indicators such as the Fear and Greed index or social media activity give a quick read on crowd emotion, which often tilts decisions more than fundamentals. Remember that cycles are psychological and structural at once, and they end only when sentiment and liquidity change. A simple risk tool is Dollar Cost Averaging, where you buy a fixed amount regularly no matter the price, which smooths out extremes and removes timing anxiety. Risk management also means sizing positions, diversifying, and keeping control of your private keys or custody choices, so you do not lose assets when markets behave badly. Bear markets often feel cruel but they can create long-term buying opportunities if you focus on projects with real usage and strong fundamentals. Bull markets feel intoxicating and breed excess, so they are a time to review risk and take profits if needed. In every phase, keep learning, check simple metrics rather than headlines, and practice a disciplined plan so that compulsion and romance do not dictate your portfolio.