Bear vs Bull Market — Differences
Characteristics of bull and bear market — sentiment, volume, media, trader psychology.
Understanding the market phase is key for strategy — the same action can be good in a bull market and bad in a bear market.
Bull market characteristics:
•Uptrend lasting months
•Every drop = "dip to buy" (and it's right)
•Mainstream media: CNBC, news, mainstream interviews
•FOMO dominates sentiment
•Altcoins rise faster than BTC
•High volume on breakouts
•IPO and ICO projects everywhere
•Leverage positions grow
•"This time is different" narrative
Bear market characteristics:
•Downtrend lasting months
•Every pump = "dead cat bounce" (and it's right)
•Media: "crypto is dead", regulatory topics
•FUD dominates sentiment
•Altcoins fall faster than BTC
•Volume low, liquidity dry
•Projects close doors, layoffs
•Leverage unwinds (liquidations)
•"What was I thinking" regrets
Transitioning between:
•Bear→Bull signal: MVRV < 1, high exchange outflows, capitulation wick
•Bull→Bear signal: MVRV > 3.5, exchange inflow, divergence (price ATH, volume not)
Psychology:
•Fear in bear = good opportunity for DCA
•Greed in bull = time for gradual selling
•Fear & Greed Index as contrarian indicator