What Is a Bull Market?

A bull market describes the condition of a financial market in which a large portion or particular prices of assets are rising or expected to rise for an extended period of time. Investors or traders in the stock market usually say they are “bullish” to illustrate their perspective of a bull market. The term can also apply to other markets such as the crypto, forex, or real estate markets.

Characteristics of a Bull Market

A bull market occurs during a period of economic progress, which is usually indicated by the following characteristics.

• Rising Gross Domestic Product (GDP) indicator.

•  Increase demand for goods and assets.

• Increased consumer spending.

• Falling levels of unemployment due to rising corporate profits.

• Investor confidence in the market and positive sentiment rise.

• An Increase in IPOs in the market.

There will be periods of retracements during a bull market that do not indicate a change in market trend.

Examples of Bull markets

The most prolific bull market in modern history is usually referred to as the period after the 2008 economic crisis until it was brought to a halt by the Covid-19 pandemic in 2020. With such a huge timeframe, the perspective of a market trend will differ from person to person.

Bull markets are said to occur after the bitcoin halving (Usually every four years) in the crypto markets. With a decrease in supply and constant or increasing demand, the impact of the Bitcoin halving is usually realized three months after, which tends to trigger a bull market within the crypto market.

Trading Bull Market

Given that prices are generally on an uptrend in bull markets, the two most common strategies to apply are buy & hold or Dollar Cost Averaging (DCA). However, it is important to note that trends do not last forever. As the famous saying goes, “the trend is your friend until it is not.” As an investor or trader, one should always DYOR and be sure to make investment decisions from your own perspective.