According to the beginner's research recently published by the global digital asset platform Crypto.com, understanding the characteristics of bull and bear markets and developing appropriate strategies is a key to improving cryptocurrency investment returns. This report especially explains the core indicators and market sentiment mechanism in an easy-to-understand way, allowing inexperienced investors to comprehend market conditions and develop response strategies.
A bull market refers to a market where asset prices are continuously rising or expected to rise. This is an environment that encourages optimism over pessimism and market entry over avoidance, occurring when macroeconomic indicators such as increased employment rates, GDP growth, and low interest rates are positive. Crypto.com's research also noted that market optimism, investor confidence, and media attention on cryptocurrencies have a decisive impact on forming a bull market.
Meanwhile, a bear market is defined as a state where asset prices have fallen more than 20% from recent peaks. If a bull market symbolizes investor sentiment of a bull lifting prices with its horns, a bear market describes a negative perception of a bear striking prices down. According to Crypto.com's analysis, major factors causing a bear market include employment reduction, deteriorating corporate performance, rapid inflation, and interest rate increases. They warned that especially during crisis situations or economic downturns, investor sentiment contracts, increasing the likelihood of continued asset price declines.
As an actual example, Bitcoin (BTC) soared from $900 to about $19,000 during the 2017 bull market, then entered a full-fledged bear market in mid-2018, declining to around $3,200. Ethereum (ETH) also showed a similar trend, plummeting from its peak of around $1,300 to the $100 range. While quick entry and long-term holding strategies are effective in bull markets, bear markets require short-term loss limitation strategies depending on the situation.
The market does not always repeat only bull or bear phases. A neutral phase where supply and demand reach an equilibrium lacks a clear direction, and during such adjustment periods, most investors maintain a wait-and-see stance, waiting for stable signals.
In the report's conclusion, Crypto.com emphasized that the market ultimately has a structure composed of recurring cycles, and clearly understanding these cycles and developing long-term strategies can be a decisive competitive advantage for individual investors. Strategies like dollar-cost averaging (DCA), risk diversification investment, and expert consultation were also proposed as practical methods to reduce uncertainty.
The core message of the research is that the criterion for investment success is not the ability to perfectly time the market, but the capacity to make decisions with consistent principles even in uncertain situations.
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