According to Studies, What are the Signs of a Crypto Bull Market?
Despite early reservations by industry experts, it would be hard to find anyone who wouldn’t describe the cryptocurrency concept as a success. Since the first Bitcoin whitepaper in 2009, the industry has grown to include thousands of altcoins, de-fi applications, NFTs, and a market cap of over $2 trillion.
One of the biggest things going for it are the multiple use cases, as learned by best crypto casinos, NFT marketplaces, and supply chain management – three separate industries that have been bolstered by the integration of crypto technology. But while the world of cryptocurrency has been evolving, there have been cracks along the way that have threatened its longevity.
The First Crypto Winter
The first sign that crypto was fallible came in 2017, when Bitcoin reached its all-time high of nearly $20,000. At the time, the broader cryptocurrency market also saw explosive growth, with a number of altcoins experiencing price increases along with the heightened media attention and the surge of new investors.
But with any sudden financial rise, there needs to be a market correction, and by 2018, Bitcoin and other cryptocurrencies experienced a significant dip. This was contributed to by investor concerns over potential regulations in major markets – while the seismic growth of crypto was positive, it put the industry further into the spotlight, and thus sparked increased scrutiny from regulators.
Throughout 2018 and into early 2019, the prices of major cryptocurrencies like Bitcoin fell dramatically, with Bitcoin falling from $20,000 to $3,000 in the space of one year. Along the way, a number of crypto projects crumbled, and well-publicised hacks – such as the hack of the Coincheck exchange in January 2018 – kept investor sentiment negative and the prices at rock bottom.
It didn’t last forever, though. Despite the downturn, the crypto winter provided a vital opportunity for organisations in the industry to focus on technological advancements and development. By 2019, the cryptocurrency market began to stabilise, and because of the groundwork laid over the last couple of years, quickly entered its next bull cycle.
The Bull Market
This crypto winter gave a valuable lesson to individuals and organisations that had invested in crypto: the industry was not infallible, but it was strong enough to ride the storm and come out on the other side. This information is particularly relevant right now, as cryptocurrency remains trapped inside its second crypto winter.
This one began in late 2021, once again, after Bitcoin reached a new peak of around $68,000. After the collapse of the Terra ecosystem and the stablecoin, LUNA, the market went into turmoil, and prices fell across the board. While signs of stabilisation have undoubtedly occurred in the last year, Bitcoin is still highly volatile, having leaped to a valuation of $70,000 and then immediately back down to $40,000 in a matter of months.
Investors will know, however, that a bull market cannot be far away, and many of them are preparing for the moment it hits – leaning on expert studies from the first crypto winter and the signs of the bull cycle that followed.
Signs of a Bull Market
The first sign, in this case, was very simple. A consistent upward trend. In 2019, the price of Bitcoin and other altcoins not only elevated, but continued on an upward trajectory for an extended period of time – which is a clear indication of why we cannot refer to Bitcoin’s new high of $70,000 as a bull market indicator, as it quickly fell away from this high and brought other altcoins down along with it.
Positive investor sentiment is similarly important. If investors are generally optimistic about the market’s future, this will introduce even more demand for assets, which will subsequently lead to increased market coverage. The more positive news about cryptocurrency is circulated, the more attractive the industry becomes, sparking further positive developments and market growth.
Bull markets are also supported by strong economic fundamentals. Over the last few months, the overall financial landscape has been looking a little more positive, which has allowed more investors the space to buy into the market and raise their trading volumes.
For investors looking deeply in the market itself, moving averages – such as 50-day and 200-day – can show more clear signs of upward trends, with shorter-term averages crossing above longer-term averages indicating a bullish crossover. The RSI and MACD can also show positive momentum and upward price trends, and will allow investors to more easily spot lessened volatility.
The Next Bull Market
As mentioned previously, cryptocurrency is now integrated into several industries – not just finance – so it’s unlikely that it’s going away anytime soon. In a way, too, the last two crypto winters have been needed to understand the industry’s weaknesses and what needs to be done to improve operations and keep crypto-related companies safe.
With this in mind, not only will there be another bull run in the near future, but the chances of a particularly damaging bear market – or even a third winter – have been greatly reduced. For this reason, plenty of investors are keeping their finger on the pulse and will be ready to take advantage when the market changes.