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Phemex Crypto Blog: Learn the latest news, updates, and industry insights on bitcoin futures, bitcoin trading, crypto derivatives exchange, and related blockchain technology.

Bullish vs. Bearish Markets: What’s the Difference?

Summary

  • A Bullish Market: Going long on or buying an asset is a bullish action that a trader can take. Being a bull or having a bullish attitude stems from the belief that an asset’s price will rise in value. A bull market is when a coin’s price is rising—called an uptrend
  • A Bearish Market: Being bearish is the exact opposite of being bullish—it’s the belief that an asset’s price will fall. A bear market is when a coin’s price is falling—called a downtrend

100 welcome bonusThe cryptocurrency market has its own language, but a fair amount of the terminology comes from traditional finance markets. If you’re just starting to trade, terms like bullish and bearish are ones you’ll hear frequently. These terms are important for effectively describing market conditions when communicating with other crypto traders. Having a clear understanding of these terms makes it easier to figure out the direction of the market.

bullish-vs-bearish

Bull or Bullish

The term “bull” or “bullish” comes from the bull, who charges upward with its horns, “thrusting asset prices up.”

Going long on or buying an asset is a bullish action that a trader can take. Being a bull or having a bullish attitude stems from the belief that an asset’s price will rise in value. To say “he’s bullish on Bitcoin,” for example, means that the individual believes the price of Bitcoin will increase.

Being a bull can represent an opinion or action. Someone who is bullish may go long on the assets they are bullish on. Or, they may just have an opinion that the asset price will rise but decide against making any trades. Bullish stances can be specific opinions about a cryptocurrency, or they can be broad opinions about the overall market.

A Bull Market

A bull market is when a coin’s price is rising—called an uptrend—typically over a sustained period, such as months or years.

Bullish, bull, and long are often used interchangeably. Instead of saying “I am long on that coin,” a trader may say, “I am bullish on that coin.” Both indicate the person believes prices will rise.

Bear or Bearish

The term “bear” or “bearish” comes from the bear, who strikes downward with its paws, “pushing asset prices down.”

Being bearish is the exact opposite of being bullish—it’s the belief that an asset’s price will fall. To say “he’s bearish on XRP” means the individual believes the price of XRP will decline in value. Bearish stances can be specific opinions about a cryptocurrency, or they can be broad opinions about the overall market.

Like bullish opinions, a person may hold bearish beliefs about a specific project or a cryptocurrency in general. A trader with bearish beliefs may choose to act on the opinions or not. If the trader does act, they may sell the coins they currently own or go short.

A Bear Market

A bear market is when a coin’s price is falling—called a downtrend—typically over months or years.

Bearish, bear, and short are often used interchangeably. Instead of saying “I am short on that coin,” a trader may say, “I am bearish on that coin.” Both indicate the person believes prices will fall.

The Bottom Line

No matter which coin you are trading, if you are taking part in any conversation about the state of the markets you will hear terms “bullish” and “bearish” being used. Hopefully, you now have a greater understanding of what they mean and will be able to work them into a conversation and impress your non-crypto friends. (but why would you have any..?)


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