You'll often hear about bull or bear markets when trading in the crypto markets. While we are debating the exact origin of these two trends, their definitions are fairly simple.
A bull market, is an upward-trending market, in other words, investors are buying. Conversely, a bear market, is a declining trend market, in other words, traders start selling in this case.
Of course, these concepts are very simple and you will soon learn that there are other ways of discerning the various types of markets. Traders use other metrics to decide whether the market is bullish or bearish, or not.
One of the most common ways is using the moving averages is to reflect the general trend of the market. Traders look at a longer or shorter period and use this tool to assess the path the market is going to go. For example, you have a relatively broad view of whether the market is bullish or bearish, with a 200-day moving average. Remember that the trend is determined by the overall slope of the moving average, that is to say, if it goes from the bottom left corner to the top right corner the trend is bullish, the trend is bearish in the opposite direction.
Another way to assess market direction is by weekly trend lines. The zones of support and resistance which travel across the charts provide useful market trend indications.
You should be mindful that most crypto traders use these terms. Keep in mind that the crypto market is demanding so don't stop at these principles and dig deeper if you want to expand your knowledge.
Thank you for reading and hope you have a good rest of the day!
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