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Market basics

Bull and bear market

A bull market is a long stretch, months at least, when prices mostly rise and people are optimistic. A bear market is the opposite: prices fall for months and fear rules.

Skenuok.lt teamPublished 3 min read

Where the names come from

The usual explanation: a bull attacks by thrusting its horns upward, while a bear swipes its paw downward. So a bull market means a long rise and a bear market a long decline. Traders who expect a rise or a fall are called bulls and bears too.

One timeline over months: a long rise with a bull head and a long fall with a bear head.
Skenuok glossary illustration: bull and bear market.

How to spot it on a chart

Crypto has no official threshold for when a market becomes a bear market. In practice, traders look at three things on the weekly or daily chart:

  • Structure. In a bull market highs and lows keep rising; in a bear market they keep falling.
  • Duration. We are talking months, not days. A few days of falling prices in a rising market is a pullback, not a bear market.
  • Price and a long average. Traders often check whether price holds above a long-term moving average, such as the 200-day one.

Real example: BTC in 2021 and 2022

BTC/USDT weekly chart from August 2021 to July 2023: a 69,000 peak, a fall of more than a year with lower highs down to 15,476, and the recovery in 2023.
BTC/USDT, 1W, 2021-08-02 to 2023-07-31, Binance data. Peak on 2021-11-10, low on 2022-11-21. Not investment advice.

On 10 November 2021 BTC/USDT on Binance reached 69,000. Then for more than a year price fell with lower highs and lower lows, until it hit 15,476 on 21 November 2022. That is a drop of about 77.6% from the peak. There were strong bounces along the way: in March 2022 price rose to 48,190, and in the summer from 17,622 to 25,211, more than 40%. Both times it was only a lower high. In July 2023 price briefly reached 31,804, more than double the low.

Common mistakes

  • Calling a new bull or bear market after a few days. Market phases are only clear in hindsight.
  • Thinking prices only fall in a bear market. As summer 2022 shows, bounces can reach tens of percent.
  • Going against the main trend just because price "has fallen too far" or "risen too much". Price can keep moving the same way far longer than seems logical.
  • Confusing the phase of the whole market with one coin. Even in a bull market some coins fall.

How to practise

Open the BTC weekly chart from 2017 and mark the long rising and falling phases: where they started, where they ended and how long they lasted. Then do the same on the daily chart and see how many pullbacks fit inside one phase. In the Skenuok app, the daily market context describes the overall market backdrop every day. More on reading charts: Technical analysis for crypto.

RiskMarket phases cannot be predicted precisely, and past cycles do not repeat exactly. This content is for education only and is not financial or investment advice. Crypto trading carries a high risk, and you can lose all the money you put in.

Frequently asked questions

How long does a bear market last?
There is no fixed length. BTC's fall from the 2021 peak to the 2022 low took more than a year, but other market cycles were different. Average durations are not a reliable basis for forecasts.
How is a bull market different from a bounce?
A bounce is a short rise inside a falling market, often up to old support that has turned into resistance. People speak of a bull market when price starts making higher highs and higher lows over months.
What is a sideways market?
That is a range: price swings between two levels for months with no clear direction. Such a phase can come before a rise or before a fall.

You can review and test yourself on these terms in the Skenuok app.

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Related terms

TrendThe overall direction of price: up when highs and lows keep rising, down when they keep falling. If price swings between two levels, the trend is...Market cycleRecurring market phases: accumulation, rise, peak, decline and bottom. In crypto they are often linked to the halving, but the exact timing does...Higher and lower highs and lowsIn an uptrend each high and low is above the previous one: HH (higher high) and HL (higher low). In a downtrend both are lower: LH (lower high)...PullbackA short move against the main trend, after which the trend continues. In an uptrend it is a temporary dip back to support.Range and channelA range (consolidation): price swings between two levels with no clear direction. A channel: two parallel lines that price moves between, up, down...HalvingAn event about every four years when the issuance of new BTC is cut in half. It limits the supply of new coins.