Why do you use bull market and bear market as metaphors? The reason may lie in the hunting methods of these two animals. The bull attacked by piercing the target with its horn. On the other hand, bears attack from top to bottom with their weight and arms.
According to Investopedia, this explanation of the origin of terms is only a possibility. "The source of these expressions is still unclear." This expression may also appear in bearskin trading a long time ago.
In the Oxford Learning Dictionary, bullish is defined as "full of confidence and enthusiasm for the future" or "causing or related to the stock price rise". On the contrary, bearish means "showing or expecting the stock price to fall".
So, what is a bull market?
Bull market or bull market is described as a period when most investors buy, demand exceeds supply, market confidence rises and prices rise. Any market with rapidly rising prices may be the beginning of a bull market.
A bull market means that investors believe that prices will rise over time. The increase of investor confidence will form a positive feedback loop, attract more investment, and thus improve pricing. Because the public's confidence in a particular cryptocurrency has a great influence on its price, some investors use a method called "market sentiment" to measure investors' optimism about a certain market.
When will the bull market end?
Even in a bull market, there will be ups and downs and pullbacks. It is possible to misread the short-term decline as the end of the long-term upward trend. Because of this, it is very important to look at any possible trend reversal signals and price activities in a longer period of time from a longer-term perspective. The word "bargain hunting" is usually used by investors in a short period of time.
The bull market will not last forever, and investors' confidence will start to collapse at some point-this may be the negative news brought by unexpected circumstances such as unfavorable legislation to coronavirus pneumonia-19 epidemic. A bear market may start with a sharp drop in prices, which will lead to a downward cycle, as more investors sell their stocks to protect themselves from future losses.
What is a bear market?
The term "bear market" refers to the period when supply exceeds demand and prices fall. Investors who think that prices will continue to fall are called "bears". Trading in a bear market can be challenging, especially for those who don't have much professional knowledge. Due to the influence of external variables such as economic growth, investor psychology and international events, the recovery is usually delayed and unpredictable, so it is impossible to predict the end of the bear market or the lowest price.
However, they may also change the rules of the game. If your investment strategy is long-term, in the long run, buying in a depressed market may pay off. Short-term investors should also pay attention to the fact that the price rise or fall is only temporary. Then there is short selling, which is a technique to bet that the value of assets will fall in the future. Dollar cost averaging method is another popular investment strategy, which involves investing a certain amount (such as $50) every week or month, regardless of the performance of assets. This allows you to invest in bull and bear markets and spread your risks.