Home Stocks & Trading Education Hub When is the Next Crypto Bull Run? – All You Need to Know
Maryam Jìnádù
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In this article, we’ll delve into the ever-curious question: “When is the next crypto bull run?” By examining market cycles, historical trends, market sentiment, technological developments, regulatory changes, and more, we aim to provide you with a well-rounded understanding of crypto bull runs.

In This Guide

What are Crypto Market Cycles?

These cycles consist of distinct phases, each with its unique characteristics and trends. Here, we’ll delve into the fundamentals of crypto market cycles, shedding light on how they shape the world of digital assets.

Defining Bull Markets, Bear Markets, and Consolidation Phases

A bull market is a phase marked by optimism, rising asset prices, and increasing investor confidence. During a bull market, the demand for cryptocurrencies typically outweighs the supply, driving prices upward. New all-time highs often characterize this period, and it’s when many investors seek to capitalize on the upward momentum. For instance, more traders will be interested in where to buy the best crypto presales and where to buy them.

Conversely, a bear market is characterized by pessimism, declining prices, and dwindling investor confidence. Bear markets can be challenging for investors as prices plummet, sometimes to levels significantly below their previous highs. This phase can be prolonged and test the patience of even the most seasoned traders.

Between the extremes of bull and bear markets are consolidation phases, also known as sideways markets. Asset prices tend to move within a relatively narrow range during these periods. Consolidation phases are marked by indecision in the market, as neither bulls nor bears have a clear advantage. They are often seen as opportunities for traders to accumulate assets before the next major move.

Explaining the Cyclical Nature of Cryptocurrency Price Movements

Cryptocurrency price movements exhibit a cyclical pattern influenced by various factors:

  1. Market Psychology: Emotions play a significant role in market cycles. In a bull market, euphoria drives prices to new highs as investors FOMO (fear of missing out) and buy-in. In contrast, fear dominates during bear markets, leading to panic selling.
  2. Speculation: Speculation can amplify market cycles. When investors believe that prices will continue to rise, they invest more, pushing prices higher. Conversely, when they expect prices to fall, they sell, exacerbating the decline.
  3. Fundamental Factors: The underlying technology and adoption of cryptocurrencies also influence market cycles.
  4. Technical Analysis: Traders use technical analysis, including chart patterns and indicators, to identify potential market cycles.
  5. External Events: Events beyond the crypto space, such as economic crises or geopolitical tensions, can impact market cycles.
  6. Halving Events: In the case of Bitcoin, its supply is capped, and halving events reduces the rate of new coin creation. These events have historically coincided with significant price increases.

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Historical Bull Runs in Crypto

Bitcoin has witnessed multiple bull runs throughout its history, each marked by significant price increases. These cycles typically last anywhere from several months to over a year.

The most iconic crypto bull run began in late 2017 and extended into early 2018. Bitcoin’s price skyrocketed from around $1,000 to nearly $20,000 during this period. This bull run lasted approximately 11 months. Beyond Bitcoin, various altcoins, especially those with unique use cases or innovative features, have had their moments of glory during separate bull runs.

Bitcoin’s bull run of 2017 propelled many altcoins to record highs. Ethereum, for instance, saw its price surge from less than $10 to over $1,400 during this period.

Identifying Key Factors that Triggered Previous Bull Runs

  1. Halving Events: Bitcoin’s supply is halved approximately every four years. This reduction in the rate of new Bitcoin creation has historically correlated with significant price increases. The halving events of 2012, 2016, and 2020 each preceded substantial bull runs.
  2. Increased Adoption: Wider adoption of cryptocurrencies, both as a means of payment and as an investment asset, has been a consistent driver of bull markets. Events like PayPal’s acceptance of Bitcoin payments and institutional investments have fueled recent runs.
  3. Market Speculation: The crypto market is highly speculative, and investor sentiment can rapidly drive prices up. FOMO (fear of missing out) often plays a significant role in these surges.
  4. Technological Developments: Advances in blockchain technology, such as the launch of Ethereum, NFT apps and the introduction of smart contracts, have been catalysts for bull runs by demonstrating the broader potential of crypto beyond just digital cash.
  5. Positive News and Partnerships: Positive news, endorsements, and partnerships with well-known companies or influential individuals can trigger significant price movements.
  6. Regulatory Changes: Regulatory clarity or favorable regulations can instill confidence in the market. Conversely, regulatory crackdowns or uncertainty can lead to bearish sentiment.
  7. Market Liquidity: Bull runs often occur when there is an influx of liquidity into the market. Traders and investors moving capital into the crypto space can drive up prices.
  8. Global Economic Conditions: Economic crises, currency devaluations, and geopolitical tensions can drive investors to seek safe-haven assets like Bitcoin, sparking bull runs.
  9. Social Media and Retail Interest: The rise of social media has enabled retail investors to coordinate and amplify their influence, as seen with the GameStop and Dogecoin movements. Social media trends can drive rapid price increases.

Market Sentiment and Speculation

The Role of Market Sentiment in Driving Bull Runs

  1. Emotion and Behavior: Market sentiment is essentially the collective emotional state of market participants. During bull runs, sentiment is overwhelmingly positive, characterized by enthusiasm and optimism. This positive sentiment can lead to a self-fulfilling prophecy as more investors buy in, driving prices higher.
  2. Fear of Missing Out (FOMO): FOMO is a psychological phenomenon where investors fear missing out on potential profits, so they rush to enter the market. FOMO can be a powerful force during bull runs, pushing prices to extreme levels.
  3. Overcoming Fear (FUD): Conversely, during bear markets, Fear, Uncertainty, and Doubt (FUD) can dominate sentiment. Negative news or events can trigger panic selling, exacerbating downward price movements.
  4. Trader Psychology: Traders often follow the crowd, buying when others are buying (greed) and selling when others are selling (fear).
  5. Sentiment Indicators: Various sentiment indicators, such as social media mentions, sentiment analysis tools, and surveys, attempt to quantify market sentiment. These tools can provide insights into the prevailing mood of the market.
  1. Media Coverage: Positive news stories, endorsements by influential figures, and reports on crypto’s potential can boost investor confidence and drive prices higher.
  2. Social Media Trends: Social media platforms, especially Twitter and Reddit, have become hubs for crypto discussions and trends. For example, the “WallStreetBets” subreddit played a role in the GameStop and Dogecoin surges.
  3. Hype and Hysteria: The speed at which information spreads on social media can lead to hype and hysteria. Cryptocurrencies, especially lesser-known ones, can experience rapid price increases based solely on viral social media campaigns.
  4. Pump and Dump Schemes: Social media can also be a breeding ground for manipulation. Pump and dump schemes involve artificially inflating the price of an asset through misleading information, only to sell off at the peak, leaving unsuspecting investors with losses.
  5. Long-Term Impacts: While social media can drive short-term price spikes, sustained market growth depends on factors like technology, adoption, and fundamentals. Long-term investors should focus on these aspects rather than short-term trends.

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Technological Developments

The Influence of Blockchain Technology Advancements

Blockchain technology is the foundation of cryptocurrencies. As it evolves, it introduces new features and capabilities that can significantly impact the market. For instance, the transition from Bitcoin’s basic blockchain to Ethereum’s smart contract capabilities expanded the possibilities for blockchain applications.

One of the persistent challenges of blockchain technology is scalability. Innovations such as layer 2 solutions (e.g., Lightning Network for Bitcoin) and sharding (e.g., Ethereum 2.0) aim to improve transaction speeds and reduce fees, making cryptocurrencies more practical for everyday use.

Privacy-focused cryptocurrencies like Monero have introduced advanced cryptographic techniques to enhance user privacy. These innovations appeal to users concerned about the transparency of traditional blockchains.

Projects like Polkadot aim to bridge the gap between different blockchains, allowing them to communicate and share data seamlessly. This interoperability can lead to a more interconnected blockchain ecosystem.

Environmental concerns surrounding cryptocurrencies have led to the development of energy-efficient consensus mechanisms. For example, Proof of Stake (PoS) and Delegated Proof of Stake (DPoS) are alternatives to energy-intensive Proof of Work (PoW) used by Bitcoin.

How New Innovations and Protocols Can Impact Market Enthusiasm

Innovative technologies often generate excitement within the crypto community. Projects that promise groundbreaking features or solutions to long-standing challenges can attract investors and developers.

Technological advancements can open new use cases for cryptocurrencies. For example, smart contracts enabled by Ethereum led to the creation of decentralized applications (DApps) and the Initial Coin Offering (ICO) craze.

Cryptocurrencies that introduce novel features or solve critical issues can gain a competitive edge. This can lead to increased demand and, consequently, price appreciation.

Successful implementation of new technologies can serve as a proof of concept, demonstrating the viability of blockchain for real-world applications. This, in turn, can instill confidence in the market.

Regulatory Changes and Adoption

Effects of Regulatory Developments on the Market

  1. Clarity vs. Uncertainty: When regulators define clear rules and guidelines, it becomes easier for market participants to navigate the legal landscape.
  2. Impact on Market Sentiment: Positive developments, like regulatory acceptance or the launch of crypto-friendly regulations, can lead to bullish sentiment and price increases. Conversely, regulatory crackdowns or uncertainty can trigger bearish sentiment.
  3. Compliance Costs: Compliance with regulations can be costly for cryptocurrency businesses. This includes implementing anti-money laundering (AML) and know-your-customer (KYC) procedures, reporting requirements, and tax obligations.
  4. Global vs. Local Regulation: Differences in regulatory approaches among countries can create challenges for businesses and investors operating globally.
  5. Institutional Participation: Regulatory clarity often paves the way for institutional investors, such as hedge funds, family offices, and pension funds, to enter the cryptocurrency market. This influx of institutional capital can have a significant impact on market dynamics.

Significance of Increased Crypto Adoption by Institutions and Individuals

  1. Institutional Adoption: Over the past few years, institutional adoption of cryptocurrencies has gained momentum. Notable institutions have invested in cryptocurrencies as an asset class. This includes companies like MicroStrategy, Square, and Tesla adding Bitcoin to their balance sheets. Institutional investors bring increased liquidity, stability, and credibility to the market.
  2. Crypto as a Hedge: Cryptocurrencies like Bitcoin are often considered digital gold and a hedge against traditional financial markets. During times of economic uncertainty, individuals and institutions turn to cryptocurrencies as a store of value and a diversification strategy.
  3. Financial Inclusion: Cryptocurrencies have the potential to provide financial services to the unbanked and underbanked populations worldwide. This increased access to financial tools can drive adoption among individuals in regions with limited traditional banking infrastructure.
  4. Payment Solutions: Cryptocurrencies are increasingly accepted as a means of payment by various merchants and service providers. This adoption as a medium of exchange can drive regular use of cryptocurrencies.
  5. Decentralized Finance (DeFi): The rise of DeFi apps offers individuals alternative financial services, such as lending, borrowing, and trading, without traditional intermediaries. DeFi adoption has been significant within the cryptocurrency space.

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Increasing Trading Volume

  1. Market Liquidity: Trading volume measures the total number of assets bought and sold within a given period. It is a reflection of market liquidity, indicating how easy it is to buy or sell a particular cryptocurrency. High liquidity tends to correlate with more stable prices.
  2. Price Discovery: When there’s a surge in buying or selling interest, prices can quickly adjust to reflect the new supply and demand dynamics. Low trading volume can result in price stagnation.
  3. Confirmation of Trends: In a bull market, rising prices accompanied by increasing trading volume suggest that the trend is strong and likely to continue. Conversely, decreasing volume during a price rally might indicate weakening momentum.
  4. Market Sentiment: High volume during price increases indicates bullish sentiment, while high volume during price declines suggests bearish sentiment.
  5. Whale Activity: Large transactions by institutional or high-net-worth investors can significantly impact trading volume.

How Spikes in Trading Activity Can Signal a Potential Bull Run

These surges often reflect a surge in market interest propelled by FOMO (fear of missing out), leading to a rapid influx of new investors and driving prices higher. Moreover, spikes in trading volume frequently align with cryptocurrencies breaking through crucial resistance levels, indicating increased willingness among market participants to buy at elevated prices and potentially signaling the commencement of a bull run.

Positive news catalysts like partnership announcements, technological advancements, or regulatory approvals can also ignite enthusiasm and heightened trading activity. In the decentralized finance (DeFi) realm, liquidity pools fuel substantial trading volume spikes as liquidity providers earn fees, further incentivizing trading. Additionally, the advent of cryptocurrency options and derivatives trading, along with viral social media trends and discussions, can swiftly amplify excitement and attract more participants, consequently elevating trading volumes.

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Breakout of Key Resistance Levels

Resistance levels are specific price points at which a cryptocurrency has historically struggled to move beyond. These levels are often seen as barriers to further price appreciation.

Important Resistance Levels and Their Significance

  1. Psychological Levels: Some resistance levels are psychological in nature. For example, round numbers (e.g., $10,000 or $100) often act as resistance points because they attract significant attention from traders and investors.
  2. Historical Data: Traders and analysts use historical price charts to identify resistance levels. These levels are based on previous highs and price congestion zones where selling pressure has outweighed buying pressure.
  3. Moving Averages: Moving averages, such as the 50-day or 200-day moving averages, can act as dynamic resistance levels. When a cryptocurrency’s price is below these moving averages, they often serve as formidable barriers.
  4. Fibonacci Retracement: Fibonacci retracement levels are used to identify potential support and resistance areas. Common retracement levels include 38.2%, 50%, and 61.8%.
  5. Technical Indicators: Various technical indicators, like the Relative Strength Index (RSI), can signal overbought conditions, suggesting that a resistance level may be near.

The Impact of Price Breaking through these Levels

  1. Confirmation of Bullish Momentum: When a cryptocurrency’s price breaks through a key resistance level, it is often interpreted as a bullish signal. It signifies that buyers have gained control and are willing to pay higher prices.
  2. Momentum Building: Breaking through resistance levels can trigger a cascade of buying activity as traders and investors recognize the breakout. This can result in rapid price appreciation as more market participants join the bullish trend.
  3. New Support: Once a resistance level is breached, it often transforms into a new support level. If the price retraces, the previous resistance level may act as a price floor, providing a safety net for traders.
  4. Technical Analysis Targets: Traders often use technical analysis to set price targets based on resistance levels. For example, they may expect a cryptocurrency to reach the next significant resistance level after a breakout.
  5. Increased Confidence: A successful breakout of a resistance level can boost investor confidence in the sustainability of a price rally.
  6. Volatility and Whipsaws: It’s important to note that not all breakouts result in sustained price increases. Some breakouts can lead to volatility and whipsaw movements, where prices quickly reverse course.
  7. Retests: It’s common for prices to retest a previous resistance level after a breakout. A successful retest, where the former resistance now acts as support, can provide further validation of the bullish trend.

Positive News and Developments

Monitoring News about Mainstream Adoption, Partnerships, and Endorsements

  1. Mainstream Adoption: When established companies, financial institutions, or governments endorse or embrace cryptocurrencies, it legitimizes the asset class and attracts more investors.
  2. Partnerships: Partnerships between cryptocurrency projects and well-known companies or organizations often generate positive news. These collaborations can lead to increased utility and use cases for cryptocurrencies.
  3. Endorsements: Influential figures, including celebrities and business leaders, can significantly impact the market with endorsements. For instance, Elon Musk’s tweets about Dogecoin had a notable impact on its price.
  4. Regulatory Clarity: Positive regulatory news, such as governments providing clear guidelines for cryptocurrency businesses, can reduce uncertainty and boost investor confidence.
  5. Technological Milestones: Announcements of significant technological achievements, such as the successful launch of a new blockchain upgrade or a breakthrough in scalability solutions, can generate excitement within the crypto community and attract new interest.

The Fffect of Positive Sentiment on Investor Behavior

  1. FOMO (Fear of Missing Out)
  2. Increased Trading Volume
  3. Long-Term Investment
  4. Market Capitalization Growth
  5. Improved Market Confidence

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Market Volatility and Uncertainty

Acknowledging the Inherent Volatility of the Cryptocurrency Market

Unlike traditional markets, cryptocurrencies are characterized by extreme price fluctuations, often swinging dramatically within short time frames. This inherent volatility can be attributed to various factors, including market sentiment, news events, and technological developments. As discussed earlier, trading volume plays a pivotal role in exacerbating or mitigating this volatility. Thus, understanding the intricate relationship between trading volume and volatility is essential for crypto traders to make informed, risk-aware decisions.

Investing and stock market concept gain and profits with faded candlestick charts.

Highlighting the Difficulty of Accurately Predicting Bull Run Timing

  1. Cryptocurrency bull runs often originate from unpredictable catalysts like a single influential tweet or regulatory announcement, rendering predictions exceedingly challenging.
  2. These surges are closely tied to rapidly shifting market sentiment, making timing a precarious endeavor, influenced by factors beyond technical analysis.
  3. Historical patterns, while informative, can’t guarantee repetition, given the youthful and evolving nature of crypto markets.
  4. The speculative market nature causes prices to detach from fundamentals, confounding traditional valuation-based predictions.
  5. External forces, including global events and regulatory shifts, have unpredictable impacts. Moreover, pinpointing the bull run’s peak for maximum profit is exceptionally arduous, often marred by greed-induced missed exit chances and market corrections.
  6. Timing-based market participation carries significant risk, necessitating robust risk management strategies to shield investors from substantial losses if predictions falter.

Distinguishing Bullish Signs from False Alarms

In this section, we’ll explore how to differentiate between genuine signals and market manipulation and the importance of using multiple indicators to confirm potential bull run patterns.

How to Differentiate Between Genuine Signals and Market Manipulation

  1. Examining trading volume is key; a real bull run typically boasts sustained volume increases reflecting genuine demand, while manipulation triggers sporadic, unnatural spikes.
  2. Scrutinize news sources. Authentic signals are typically rooted in concrete news, partnerships, or tech advancements, not rumors.
  3. Keep an eye on whale activity; sudden, large transactions designed to manipulate often lead to quick reversals.
  4. Utilize technical analysis, seeking alignment with support, resistance, and trend indicators for genuine signals, versus unnatural price patterns caused by manipulation.
  5. Note the timing and consistency; true bull runs exhibit steady price movements, while manipulation results in erratic spikes.
  6. Analyze market sentiment on social media; genuine runs come with sustained positive sentiment, while manipulation creates short-lived hype.

Using Multiple Indicators to Confirm Potential Bull Run Patterns

To confirm potential bull run patterns, traders utilize a multifaceted approach. This involves a combination of technical indicators like the Relative Strength Index (RSI), Moving Averages (MA), and Fibonacci retracement levels, with the convergence of these indicators strengthening the case for a bull run. Fundamental analysis becomes paramount, evaluating aspects such as the cryptocurrency project’s team, technology, adoption, use cases, and partnerships. A robust fundamental foundation often supports a sustainable bull run. Market depth analysis involves scrutinizing the order book to gauge buying interest at various price points, a genuine bull run typically marked by heightened buying pressure.

Traders also scrutinize trading patterns, such as ascending triangles, cup and handle formations, and bullish flag patterns, recognizing these in conjunction with other indicators for potential bull run signals. Seeking validation from respected cryptocurrency analysts and experts adds valuable perspectives, as does evaluating longer-term trends and historical data to place current movements in a broader context. Throughout this process, prudent risk management is pivotal, encompassing the setting of stop-loss orders, portfolio diversification, and staying within one’s affordable investment limits.

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Long-Term vs. Short-Term Investment Strategies

Discussing the Differences between Short-term Trading and Long-term Holding

Discussing the differences between short-term trading and long-term holding reveals two distinct approaches to cryptocurrency investment. Short-term trading involves holding assets for brief periods, usually minutes to weeks, to capitalize on price fluctuations. Traders, who engage in frequent daily or even multiple daily transactions, rely heavily on technical analysis on day trading apps and set stop-loss orders to manage risk, enduring a taxing monitoring process.

On the other hand, long-term investors hold assets for months to years, driven by faith in the cryptocurrency’s future potential. They weather short-term volatility, focusing on project fundamentals, utilizing fundamental analysis, maintaining a patient approach, and often employing dollar-cost averaging for steady accumulation. These disparate strategies cater to varying risk appetites and investment horizons in the dynamic world of cryptocurrencies.

The Implications of Entering the Market Based on Bull Run Predictions

This involves a multifaceted approach to cryptocurrency investment. Firstly, it often implies engaging in short-term speculation, driven by the anticipation of quick gains. However, this approach carries heightened risks due to the cryptocurrency market’s inherent volatility. Timing is another crucial factor to consider; accurately predicting the start of a bull run is challenging, and mistimed entries can lead to missed opportunities or investing at the peak of a speculative bubble.

Effective risk management is paramount, irrespective of bullish expectations, involving diversification, setting stop-loss orders, and avoiding excessive leverage to safeguard against potential losses. Evaluating your long-term vision and aligning it with your investment strategy is essential. Are you seeking immediate profits, or do you believe in the long-term potential of cryptocurrencies? This decision guides your approach, whether short-term trading or long-term holding. Regardless of your chosen horizon, conducting a comprehensive fundamental analysis of your chosen projects remains a crucial aspect of due diligence.

Finally, staying informed through continuous market monitoring, news tracking, and technical analysis is vital, as bull runs often coincide with heightened market hype and sentiment shifts, which can significantly impact your chosen strategy.

Trade Crypto Tokens – eToro Complete Guide

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eToro is a popular cryptocurrencies and commodity trading app. Here, we’ll provide a step-by-step guide on how to open an account on eToro so that you can participate in the cryptocurrency market and potentially benefit from the next bull run.

Creating an eToro Account in Five Steps:

  1. Navigate to the eToro website and click on “Create an account”.
  2. Provide Your Information like username, e-mail address, or register with social accounts like Facebook and Google.
  3. Review the terms and conditions, then proceed if you are okay with them.
  4. Click the “Create Account” button.
  5. Verify your e-mail.

When is the Next Crypto Bull Run? – Conclusion

As we’ve explored the various factors that influence cryptocurrency bull runs, it’s essential to remember that predicting the exact timing of these market movements remains challenging. The cryptocurrency market is dynamic, volatile, and influenced by a myriad of factors, making it inherently unpredictable. However, staying informed and adopting sound investment strategies can position yourself for potential opportunities when a bull run occurs. Don’t miss out on potential opportunities in the cryptocurrency market. Join eToro today and embark on your crypto trading adventure.

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Maryam Jìnádù

Maryam Jìnádù

Maryam Jinadu is a prolific crypto and fintech content writer who has been in the space since 2018. Her sharp insights and creative takes have earned praise from top industry publications, with her work appearing on notable sites like TradingPlatforms, Dappgambl, BuyShares, Swapzone - just to name a few.