The Crypto market moves in trends.
And what is this Trend?
The trend is the overall direction of a market or an asset’s price.
Stay with me while I convey you through the categories of market trends.
Market trends are of two categories, they are; UPTREND & DOWNTREND
An uptrend describes the price of an asset when the direction is accelerating or moving upwards. Here, the trend is said to be “Bullish”
This is the downward movement of market price from their previous state. When a market is experiencing this downward movement, the trend is said to be “Bearish”.
EFFECTS OF MARKET TRENDS ON TRADERS AND INVESTORS
Market trends affect traders and investors enormously, these effects could be positive or negative.
In a Bull market;
Investors become optimistic and are willing to take part in the market in order to gain profit.
Investors often have faith that the uptrend will continue over the long term.
Traders employ a variety of strategies, such as increased buy and hold, to profit off bull markets.
It is difficult for traders and investors to predict the bull market.
In the bull market, there is always a general increase in the amount of IPO(Initial Public Offering) activity.
On the other hand, a downtrend is often dreaded by investors.
Trading during a downtrend is usually difficult, risky and requires a mastery of various skills and utilization of different strategies to be successful. In fact, it is not an easy game.
The bear market presents a set of opportunities, which if properly managed can potentially lead to an upturn in fortune for investors and traders.
There are numerous strategies to use when trading during a bear market, ranging from the “buy the dip” strategy to a more sophisticated approach like shorting, swing trading, margin trading, scalping, and lots more.
Therefore, to be successful in a bear market, it is necessary to choose the right strategy.
When it comes to trading and investing, it is generally a better idea to follow the direction of the market trend.
And if you are not conversant with the underlying trends and how to adapt to the changing conditions of the market, it could be challenging because the different market trends can lead to wildly different market conditions.