Everything in life is cyclical, and financial markets are no exception. If you understand the basic rules by which the cryptocurrency market operates, you can work in this industry much more effectively and easily by selecting suitable investment strategies.
In this article, we will tell you all the essentials about cryptocurrency market trends—what they are, why they change, and when the next bull run might be.
What is a crypto bull run?
First, let's understand what a crypto bull run is. This term refers to a period when the market is flourishing: over an extended time, more and more new people join the industry, new projects and cryptocurrencies emerge, and most importantly, the prices of digital assets rise rapidly. The rapid price increase is the main characteristic of a bull run crypto.
Other characteristics include:
- Emergence of new investors. As noted, during such flourishing periods, more players enter the crypto market. This is crucial because the influx of new participants causes demand to exceed supply, driving up prices. Consequently, many assets reach their all-time highs during a crypto bull market.
- Increase in trading volume. It's straightforward here as well—more participants join the market, buying and selling cryptocurrency. Alongside their activity, market capitalisation and trading volumes grow.
- Positive investor sentiment. Unsurprisingly, in such prosperous conditions, positive sentiments prevail among investors. This means they look at the future prospects of the industry with optimism and believe in its resilience. Hence, they are willing to invest even more.
However, bull markets don't last forever—bear cycles inevitably follow, during which everything happens in reverse. You can find all you need on bear markets in this article.
Factors influencing crypto bull runs
In reality, a multitude of factors influence the emergence, intensity, and duration of market cycles. Here are the most significant ones:
Investor sentiment. Market psychology plays a massive role in these processes. The anticipation of growth and confidence in it can stimulate mass purchases of crypto assets. As we've already understood, increased demand and buyer activity push prices upwards. Amusingly, this often turns into a self-fulfilling prophecy.
News background. This is quite straightforward—the more positive the news, the more optimistic the investors become. Anything can delight market players, from major state-level news to relatively small positive updates in companies. A prime example: when Tesla announced in 2021 that it would accept Bitcoin as payment, BTC's price hit a new high above $44,000.
Regulation. Governments significantly impact decentralised finance. Clear, understandable, and sensible regulatory rules for the crypto industry can attract more new players, potentially kick-starting a new growth cycle. Conversely, overly strict regulation or a total lack of it makes investors wary of the digital assets market, leading them to opt for other, more familiar and reliable investment options.
Macroeconomics. Everything is interconnected here as well: the more unstable the economy, the more people turn their attention to the young and appealing alternative to traditional money—cryptocurrency. In times of high inflation, investors look to digital assets as a means to preserve their wealth.
Developments and innovations. The emergence of new technologies and applications, along with the improvement of existing blockchains and crypto projects, can attract the interest of new investors. For instance, if a project team comes up with new use cases or makes their product more accessible, it will draw more users.
Historical examples of crypto bull runs
Sometimes, a historical perspective can offer better insights into the market than the most advanced technical analysis and other market indicators. So, let's quickly explore how cryptocurrency market trends have evolved throughout the market's history.
Bull cycle 2009-2011. The first significant cycle accompanied the birth of Bitcoin in January 2009, making it more apt to call this the Bitcoin bull run. During this cycle, BTC reached its first all-time high (ATH) of $32 in June 2011.
Bull cycle 2013-2017. The next phase of growth came shortly after and lasted a full four years. This period can rightly be termed the greatest crypto bull run ever, as Bitcoin's price skyrocketed from under $1,000 to nearly $20,000 in December 2017.
Bull cycle 2020-2021. The most recent bull market lasted just a year, from 2020 to 2021. During this period, Bitcoin set a new ATH of $68,000 in November 2021. This bull run was primarily triggered by institutional investors, including MicroStrategy and Tesla, who began to show more interest in cryptocurrencies during this time.
The up columns are Bitcoin's all time highs (ATHs) during bull cycles. Down columns are Bitcoin's all time lows (ATLs) during bear cycles.
Predictions and analysis for future crypto bull runs
If you’re a crypto bull eagerly awaiting the next growth cycle, let’s delve into this topic together.
Currently, it’s challenging to pinpoint whether the crypto market is in a bull phase. Some analysts suggest that a new bull phase has already begun, especially since Bitcoin hit a new all-time high of $73,738 on March 14. Meanwhile, others argue that the altcoin season hasn’t started yet, implying it’s too early to declare a full-fledged bull market.
However, experienced members of the crypto community increasingly predict that we will see the next crypto bull run in 2024 and 2025. Two fundamental factors are expected to influence the onset and intensity of this bull market:
- Increased institutional participation. The launch of spot ETFs for the two leading cryptocurrencies, Bitcoin and Ethereum, has sparked growing interest from large investors. If these institutions continue to inject capital into the industry, such massive inflows will inevitably drive cryptocurrency prices higher. You can find more details on this in our dedicated article.
- Regulatory environment. The immediate future of the crypto market heavily depends on the US regulatory landscape. The country’s presidential elections are set for November, and if a crypto-friendly candidate like Donald Trump is elected, the crypto community could see significant positive changes. More information on this topic is available in our article.
Conclusion: navigating the crypto market during bull runs
Bull cycles in the crypto market are periods that investors and traders love, using them to grow their capital. However, bull markets can also be quite risky due to market volatility and price speculation.
To successfully participate in crypto bull runs, players need to adhere to proper risk management principles. This includes conducting thorough research on projects, diversifying their portfolios, using tools like technical analysis and other market indicators, and only trading with money they can afford to lose.
By staying informed and cautious, you can make the most of the opportunities that come with the next crypto bull run. And for that, the itez blog is here to help—we regularly publish fresh news, reviews, and educational materials to ensure you’re well-prepared for the next bull run.
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This article is not investment advice or a recommendation to purchase any specific product or service. The financial transactions mentioned in the article are not a guide to action. It’s not intended to constitute a comprehensive statement of all possible risks. You should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.
