Top 10 Ways To Trade In Crypto Bull Market

The magic of a crypto bull market – a time when your crypto portfolio transforms from a slow-moving snail to a supersonic rocket!

Yes, everyone loves when the market is doing well, and stock prices are on the rise. Understanding bull markets is valuable for everyone, even if you’re just starting your crypto journey.

This guide equips you with the tools to do just that – no more FOMO, just calculated moves towards maximizing your profits. Ready to get started?

What is a Crypto Bull Market?

A crypto bull market is when financial markets rise for a certain time period. However, it does not mean that there won’t be slight dips in the market either. It indicates steady financial growth as the value of stocks tends to ascent. Let us understand the bull market in simple words!

Consider having a rare stone that many people do not know about. Suddenly, everyone starts talking about how pretty your stone is, and more people wish to own it. As a result, the price of the stone goes way up. That is what happens during a crypto bull market. When more people wish to buy a particular cryptocurrency, its price goes up steadily!

But why do we call it the “bull” market?

We imagine a strong animal charging forward when we think of a bull. Metaphorically, this is how the market performs when the economy is doing well and unemployment is low. Bulls also thrust their horns into the air, referring to the rise in the stock market. Hence, we call it the bull market. 

Is it good or bad?

A bull market is a good thing! It indicates economic growth and optimism among businesses and investors. Depending on the sector, it can also lead to equity growth and higher dividends.

When shall we expect the next bull market?

With the Bitcoin halving event set in 2024, the experts are optimistic about having the next bull market around that time. The event occurs every four years and sets the benchmark for crypto bull run predictions. Ethereum 2.0 (the much-awaited upgrade) can also create hype for the Ethereum ecosystem, thus increasing the interest of developers, investors, and users in the system. 

With the approval of spot Bitcoin ETFs and greater institutional adoption, the crypto bull market could be around the corner in 2024!

Here is an example of a bull run in the stock market triggered by the COVID-19 pandemic, during which online shopping spiked significantly in lockdown. 

How To Spot a Bull Market?

Understanding the performance of an asset and the broader market is essential. Some widely used technical indicators include:

• Bitcoin Dominance: Being the king of the crypto space, Bitcoin leads many instances. However, other cryptocurrencies are seen performing well too. During the recent bull run markets, Bitcoin dominance dropped, while others saw a surge in popularity. If the total market cap is growing while Bitcoin dominance is decreasing, it can strongly indicate a bull market!
• Relative Strength Index: RSI is assessed to check whether a specific asset is overbought or undersold. This helps in determining a bullish or a bearish trend. If the RSI is around 70%, it shows that the crypto is overbought. If it is under 30%, it shows an underbought crypto.
• Moving Average: This statistical term defines the average price of a specific crypto over a period of time, normally 200, 50 or 20 days. If the price is above the long-term moving average, it indicates a bullish trend!
• Advance/ Decline Line: It is the way to figure out the tops and the bottoms. The charts number the advancing issues divided by the number of declining issues over a given period. A number greater than 1 indicates a bullish market, while less than 1 shows a bearish market.

These indicators provide valuable insights for anticipating the next bull market.

How To Trade in the Bull Market?

In a bull market, staying informed about market movements, updates, and learning mechanisms is crucial. Traders often adopt a strategy of buying (going long) in anticipation of a prolonged upward trend in prices. Coinpedia offers a platform for traders to stay updated and engage in bull market trading effectively.

As we look forward to potential market shifts in 2024, keeping an eye on these indicators and implementing informed trading strategies can be key to navigating the next bull market successfully.

Top 10 Strategies

• Buy Early and Diversify

While we cannot guess the exact onset of a bull run, the third touch of price action on a single line helps in confirming its recent commencement. This trend helps in buying assets in an early stage before the price hits its all-time high.

Also, one won’t profit from a bull market unless he is invested in stocks. So, check the asset allocation. Market conditions can change quickly, and a true bull market may be slower to materialize than we expect. Don’t assume prices are only going up from here. Look to hold a good mix of everything! If one loses, you can depend on the other.

• Buy and Hold

Embracing simplicity, the buy-and-hold strategy entails purchasing a security with the intention of holding onto it for future selling. This approach relies on investor optimism fueled by the bullish market sentiment.

• Increased Buy and Hold

It is a variation of a straight buy and hold strategy and it involves additional risks. The investor continues to add to his holdings in a particular security so long as it continues to increase in price. He buys an additional fixed quantity of shares for every increase in the stock price of a pre-set amount. The strategy is simpler and does not require much of a statistical approach. It could be suitable for beginners!

• Retracement Additions

A brief period in which the security’s price trend is reversed is called retracement. Even during a bull run, it is unlikely that we only see growth. There could be shorter periods where small dips occur as well. Investors watch for retracements within a bull market and buy the dip during the decline periods. If the bull market continues, the price of security will quickly move back up and provide the investor with a discounted purchase price!

• Full Swing Trading

For the more active investor, full swing trading employs aggressive techniques, including short-selling, to maximize gains during market shifts within the bull run. This strategy demands diligence and thorough market monitoring.

• Buy Call Options

It’s a popular strategy where there is a contract with a due date that gives one the right to buy a certain asset at a specific price. We may end up deciding not to buy at all as there is no obligation to do so. People follow the strategy to buy the asset at the price they have been aware of beforehand.

A call option gives its holder the right to buy the stock at a particular price (the strike price) until a specified future date (the expiration date). Calls go up in value as the underlying stock’s price rises. If the stock price rises past the option’s strike price, the option buyer can exercise the right to buy the stock at the lower strike price and then sell it for a higher price on the open market, thus generating a profit. Options buyers may also choose to sell the call option itself in the open market to close out positions that are beneficial.

• Take profits at regular intervals

This is one way of securing the profits we gain from trading in the bull market. At regular intervals, one may aim to lock the profits.

• Day Trading

Day trading involves buying and selling securities within a single day and being flat at the end of the day. Day traders love bull runs! Day traders would trade on lower time frame charts such as the one-hour or fifteen-minute chart. While day trading is one of the popular methods of trading bull markets it could also be challenging for beginner traders.

This is because, in bull runs, markets tend to move very fast, especially on the lower timeframes. Analyzing the market and making trading decisions in a very short space of time does require some practice. Day traders may choose to focus on high-quality stocks within strong performing sectors within a bull run. However, another option is to trade the overall stock market index using CFDs which allows the ability to trade outside the traditional stock market opening hours making it less prone to extreme gaps. 

• Consider small-cap coins

New tokens with smaller market caps may have the potential that they have not had a chance to present in a saturated state of the market yet. In a bull market, they might get a chance to outshine others. This kind of market state creates conditions for newer coins to boost their market share and returns. Always keep an eye out for such tokens!

• Prepare exit strategy

Bull markets lure investors to stay just one more day to get higher profits. This profit lust is never ending! Finally, a market correction brings prices crashing down and then you realize you should have already exited!

Experts recommend that investors have an exit strategy in advance! Make a decision to leave the market when your portfolio hits a certain price and always keep up with that commitment. This way, you will protect yourself from sudden fall-outs.

Historic Bull Markets

• The Reagan Bull Market: In the 1980s, the stock market experienced a bull market that was driven by the economic policies of the Reagan administration and the strong performance of the technology sector. This bull market lasted from 1982 to August 1987 and saw the S&P 500 index gain over 100%. It ended with the Black Monday stock market crash in October 1987, which saw the S&P 500 index decline by over 20% in a single day!
• The 1990s Market: This is also known as the dot-com bubble, and was driven by the rapid growth of the internet and technology sectors. It lasted from the early 1990s until the early 2000s, and saw the S&P 500 index gain over 200%.
• The 2009 Bull Run: It began in March 2009 and lasted until February 2020, making it the longest bull market in history. It was driven by strong earnings growth, low interest rates, and investor optimism, and saw the S&P 500 index gain over 300%.

Conclusion

Bitcoin has touched its $50,000 mark recently! Does it signify the Bitcoin bull run? 

With so many speculations of having the next bull market in 2024, we have our fingers crossed for the epic turn of events and witness some huge profits in the upcoming months! If you plan on learning and gaining the most out of the next bull market, Coinpedia is here to fill in such useful information for you. Charge forward, and remember: knowledge is your golden ticket to success!