Litecoin is one of the first open-source altcoins based on the original Bitcoin code. It was initially a strong competitor to the first cryptocurrency. However, as the cryptocurrency market expanded, Litecoin’s popularity gradually declined.
What is a bearish trend on the cryptocurrency market?
The cryptocurrency market has already broken all the records of the world markets in terms of the number of financial transactions and money transfers. Everyone has heard about global fashion trends for a long time, but let's figure out what a trend is in the world of finance. A trend in the world of finance means a long-term pattern when the price fluctuates. Financial trends arise due to a variety of special reasons that traders should identify and hedge before these changes begin to affect the price. Some trends affect the price decrease, while others affect its increase. Today we will talk about bearish and bullish trends.
Why a bull and a bear?
Why did they take a bull and a bear to determine changes in prices on the cryptocurrency market? In a clash with the victim, the bull raises on the horns, respectively, the bullish trend embodies the upward movement of market assets. The bear, in turn, presses the victim to the ground, down, similar to the decline in prices on the market.
Unlike pumps, surges, drawdowns and other types of exchange rate volatility, these trends are characterized by their duration and the holistic movement of the entire cryptocurrency market. When the period of bulls comes, the prices of all coins rise, and when the period of bears (bearish trend) - the prices of all coins decrease sharply.
Bearish trend: what is it and how to recognize it?
- A bearish trend is determined by a sharp decline in prices. Each subsequent decline will be lower than the previous one.
- The price of assets fluctuates in the middle positions.
- The negative mood of traders and not the most positive news in the direction of digital assets.
- The number of people willing to buy is much less than to sell.
In order to make sure in a particular trend, a trader must observe the changes for a certain period of time in order to sum up and draw a conclusion. In exchange for a small amount of wasted time, you will gain confidence in this or that trend.
Bear Market
A bear market is characterized by a 20% decline in market activity and a sharp drop in price over +/-60 days. Such a market is often associated with a delay in economic progress, it is low income, high unemployment, insufficient productivity and small commercial profits.
It will be more difficult to earn in such a market than in others. One option is short selling. What is the point? You need to sell the borrowed assets, with the hope of buying them later at a low price. The strategy is quite risky, but working.
Bull Market
A bull market is the opposite of a bear market. This market is characterized by a rather large increase in prices and a more optimistic mood among traders. In a bull market, traders are more confident about the future as prices continue to rise every day. With prices rising like this, investors jump in early and use the current situation with rising prices to make their profits.
It is difficult to say exactly when the market will peak, but if you carefully monitor this, the losses will be small and, in most cases, temporary. Many cryptocurrencies can be purchased at low prices precisely at the end of the bullish phase, this will allow you to increase your capital.
How to make money on a bear market
Trading on a bear market is a rather complicated, but no less interesting process. At first glance, it may seem that, unlike a bullish trend, a bearish trend is not so positive. But it is important to understand that in order to avoid imbalances in the cryptocurrency market and obtain constant profits, both trends and other market factors are important.
One of the determining factors is the bitcoin rate. When the bitcoin rate goes up, the prices in the market rise, and when it falls, it pulls the entire market down with it.
With the right approach, you can benefit from both markets. Instead of taking out loans, be patient and wait for the stability of the situation. While other users will make hasty and thoughtless decisions, you will be cool and sensible in your approach.
If you decide to work on the cryptocurrency market, then learn the basic terms, key indicators, trends, tools, talk to professionals, because the most reliable way to deal with the volatility of rates is to be prepared for it in advance.
Recall, How to trade bitcoins
