When we talk about markets, both common and crypto, “bull” and “bear” often appear in headlines and conversations, although such use usually depends on financial knowledge and experience. What do these two terms mean?
Bullish and upward refers to market sentiment that is perceived together or expressed by an individual. If someone is bullish, it means that they expect the price or asset class to rise. Conversely, bearish indicates negative price expectations. Someone with bullish slenderness is sometimes called a “bull” or “bulls” if the market group or faction is bullish. The “bears” therefore expect a decline in asset values.
Why use bulls and bears as animals of choice for such terminology? The answer may lie in the way both animals attack their prey. The bulls attack in an ascending manner and pass their corners through their targets. The bears, on the other hand, start high and attack with their weights and arms.
However, this explanation of the roots of terminology is only one of the possibilities according to and Investopedia. “The true origin of these terms is unclear.” Words can also come from dealing with bearskin a long time ago.
Oxford Student Dictionary describing bullish as: “feeling confident and positive about the future” or “causing or associated with rising stock prices.” Bearish means: “to show or expect a drop in stock prices.”
Desire for a bear?
Bullish and bearish desires depend on a number of factors. In general, traders may be less concerned about whether a market or an asset is ascending or bearish if they can trade both ways (called Go Long and Short). Traders often move in and out of positions more often than investors who use shorter time horizons for their games.
Instead of traders wanting bulls over bears, or vice versa, traders may care more about whether they are correct in their bullish or bearish ratings and benefit from trades if they determine exactly which direction the asset will take, depending on trading strategy used. However, some traders’ strategies, talents or tendencies may favor one market situation over another.
On the other hand, investors generally buy into positions and hold them for a long time, benefiting from rising prices, so logically they might want bull markets. An investor can take a long-term short-term position or sell an asset if he has a bearish view of the asset, although the most anyone can earn (in almost any case) is a 100% profit if he shorts the asset to zero at the absolute peak. On the other hand, assets can rise in price almost virtually, offering possible profits of more than 100%.
Specific cryptocurrency dialing, why an investor or trader might want bitcoin (BTC) or any given altcoin to drop prices, even if they are generally rising in the crypto industry? One reason may be their position. If a trader is bear on BTC – he expects upcoming falling prices – he can enter into a short trade on BTC, and therefore logically wants his price to fall because he would profit from the decline in assets.
Traders can even be bear in the short term and bull in the short term, or vice versa. For example, they may expect bitcoins to track price over days or weeks, but will eventually rise and return to an upward, several-month trend.
Investors or traders may also have a bearish short-term view and a bullish long-term view who want lower prices in the near future to buy certain assets at relatively cheaper prices. Conversely, a market participant may have a short-term bullish outlook with a long-term bearish outlook. They may think that prices will rise due to hype or other factors, so they can shop short or go long, eventually expecting to eventually sell their positions because they believe the market will be a bubble or something.
It is important to realize that in markets, defining can be short-term and long-term subjective.
A look at what could cause bull or bear bias
Each person’s bullish or bearish view is probably based on a wide range of components, such as charts, reports, and general knowledge. A market participant may think that bitcoin or altcoin is bear for some time based on certain conditions or chart patterns.
They can also monitor bear assets in the long term after negative announcements, such as specific government regulatory measures. One could hold a bullish look at a period based on upcoming events, such as the launch of bitcoin futures trading on the Chicago Mercantile Exchange in 2017.
People may also have an overall bearish or bullish view of the asset as a whole. MicroStrategy CEO Michael Saylor sees bitcoin as a new way of storing value. Golden defense attorney Peter Schiff, on the other hand sees bitcoin as a bubble.
So many factors play into different parts of a bull and bear nature. Time frames, perspectives, opinions and events can all affect a person’s view of an asset or class of assets. Ultimately, each individual must come to his or her own conclusion about what he or she thinks.