What is a bull run, where is a bull run and what causes a bull run are discussed in this article. A lot of crypto investors wait for a moment called 'Bull Run' where rising prices, demand outweighing supply and high market confidence are found.
What is a Bull Run?
A bull run refers to generally favorable economic conditions. It means that a market is on the rise and is also usually accompanied by positive investor sentiments concerning the current uptrend.
There is a sustained increase in asset prices in a bull market, accompanied by a strong economy and high employment levels.
This applies to cryptocurrency markets as well as traditional markets. In cryptocurrency, however, it is more common to see stronger and more consistent bull-run crypto phases.
What is a Bull Run in Crypto Like?
A 40% increase in price over one to two days is quite the usual scenario. This is because crypto markets are relatively smaller than traditional markets and are, therefore, also more volatile.
In the crypto market, the charging bull heralds a bullish phase for cryptocurrencies. Here, you'll observe cryptocurrencies growing in value with generally favorable economic conditions and optimistic investors looking to make the most of their rising crypto portfolios.
The investor starts bull markets through the purchase of securities. This can also be done with fiat currency, as bullish markets typically raise the price of securities. The bull market goes on for as long as supply is exceeded by demand. After a while, the bull gets tired, so to speak, and the market shifts and turns into a bear market.
What Causes a Bull Run?
Investors are the ones who begin a bull market. When they feel that prices will start to rise and continue doing so for an extended period, they start buying stocks (at a low price) and are optimistic about their return on investment (ROI). The increased optimism among investors likewise causes stock prices to continue rising.
There are also other factors that cause a bull market to emerge. Among these are a strong gross domestic product (GDP) and low unemployment rates. Generally, favorable market conditions cause an increase in investors' confidence. Cryptocurrency bull markets are, likewise, inf by similar factors to traditional markets.
However, crypto markets are still relatively new on the scene, compared with traditional securities which have been around for hundreds of years. With fewer total investors, crypto may also be driven by factors unique to its niche.
Facts that Drive Crypto Bull Run
- Mainstream and pop culture support: Think of the 2017 bull runs influenced by the likes of Paris Hilton and DJ Khaled, and shows like The Big Bang Theory.
- Introduction of institutional capital: A good example is MicroStrategy's $650M Bitcoin (BTC) investment (over 70,000 BTC).
- Growing optimism from traditional finance: JPMorgan strategists said Bitcoin could rally to as high as $146,000.
- Unique events that threaten traditional finance: COVID-19, for example, drove a lot of people to turn to crypto amid the stress caused by the pandemic on traditional financial markets.
Characteristics of a Crypto Bull Run
The typical attitudes and actions that characterize a bull market are:
- Increased prices over a sustained period of time;
-Strong demand despite weak supply;
-Increased investor confidence in the market;
- Overpricing of certain projects;
- Insertion of talks about cryptocurrency in mainstream media as well as social media;
- General interest in cryptocurrency among celebrities, influencers and other sectors who might not have been interested in crypto before;
- Hard rise of prices in the event of good news;
- A slight drop in prices in the event of bad news.
Bottom Line
Crypto bull runs are caused by investors and they get profit from it. But there are pros and cons of a bull run. So, in this article, you will learn where is bull run and what causes a bull run.
