Bull market and bear market: how not to lose money in them

Every crypto trader encounters two main market phases sooner or later — and it doesn’t matter if you’re a beginner or an experienced investor. Bull and bear markets determine how to make money and how to survive in crypto at all. Let’s understand without unnecessary words.

What happens in a bull market

A bull market is when everyone is having fun and buying cryptocurrencies. Prices are rising, new investors are entering the market, hope is in the air. Here are the signs of a classic bull market:

• The asset price is steadily increasing by 20% or more
• News is only good: blockchain developments, large investments, institutional adoption of crypto
• Trading volumes are soaring, demand exceeds supply
• Newcomers are drawn into crypto in waves

Recall 2020-2021: Bitcoin soared from $10,000 to $69,000 — that was the power of a bull market. People holding positions made huge gains.

In a bull market, simple strategies work: long-term investing, HODL (just hold and do not touch), and trend trading. The main thing is not to panic during corrections.

When does a bear market occur

A bear market is the complete opposite. It’s a period when prices fall, investors panic, and everyone rushes to sell their crypto. Here’s what it looks like:

• Assets lose 20% or more from peak values
• Fear and uncertainty dominate the market
• Trading volumes decline, fewer buyers
• Negative news worsens the situation: regulatory restrictions, scandals, economic crisis

A classic example is 2018, when Bitcoin dropped from $20,000 to $3,000. Many lost money simply because they sat and waited.

In a bear market, experienced traders don’t sit idly: they use shorting (sell on margin, hoping to buy cheaper), transfer funds into stablecoins to preserve capital, or look for alternative assets for diversification.

What is the real difference

How to profit in any situation

In a bull market:

1. Buy promising projects and wait for growth
2. Use the HODL strategy — just hold assets
3. Trade pullbacks — buy on small dips, sell at peaks

In a bear market:

1. Open short positions — profit from falling prices
2. Switch to stablecoins — this preserves capital
3. Diversify your portfolio — don’t keep everything in one asset

How to identify a market reversal

It’s impossible to say exactly when a bull or bear market will start, but there are signals:

Signs of a bullish trend beginning:

• Interest in crypto is growing, trading volumes increase
• Charts show a trend reversal after a prolonged decline
• Positive news and large institutional players are entering

Signs of a bearish market beginning:

• Sharp decline after a period of growth
• Waves of panic selling
• Increased regulation, negative media coverage intensifies

The main rule

Understanding what stage the market is in is 50% of success. The remaining 50% is discipline, analysis, proper risk management, and the ability not to make stupid decisions during moments of strong emotion. In a bull market, it’s easy to overestimate opportunities; in a bear market, it’s easy to panic. Those who learn to operate in both conditions earn regardless of the market phase.