When it comes to markets, both mainstream and crypto, “bullish” and “bearish” often make headlines and conversations, although such usage is usually dependent on financial knowledge and experience. What do the two terms mean?
Bullish and bearish refer to market sentiment seen collectively or expressed by an individual. When someone is bullish, it means they are expecting the price of an asset or asset class to rise. Conversely, declining refers to negative price expectations. Someone who is bullish is sometimes referred to as a “bull” or “bull” when a group or faction in the market is bullish. Bears therefore anticipate falling assets.
Why should bulls and bears be used as the animals of choice for such terminology? The answer may lie in the way the two animals attack their prey. Bulls attack upwards and drive their horns through the target. Bears, on the other hand, start high and attack down with their weight and arms.
However, this explanation of the roots of the terminology is only one possibility, according to Investopedia. “The actual origins of these terms are unclear.” The phrase could also come from bearskin stores.
The Oxford Learner’s Dictionary describes bullishly as: “feeling confident and positive about the future” or “causing or being associated with a rise in the stock price”. Bearish means: “Show or expect a decline in share prices.”
Do you feel like being bearish?
Bullish and bearish desires depend on a number of factors. In general, traders care less whether a market or asset is bullish or bearish as long as they can trade both ways (called long and short positions). Traders often move in and out of positions more often than investors and use shorter time horizons for their games.
Rather than wanting an up move versus a down move, or vice versa, traders can be more concerned with whether they are correct in their bullish or bearish view and benefit from trades as long as they determine exactly which direction a particular asset is going depending on the trade Strategies used. However, the strategies, talents, or tendencies of some traders may favor one market condition over another.
On the flip side, investors generally buy into positions and hold them for longer periods of time, benefiting from the rise in prices so logically they may want bullish markets. An investor can take a long-term short position or sell an asset if they have a bearish view of an asset, although most of what anyone (in almost any case) can get is a 100% profit when on the absolute Tip is empty and the asset rides to zero. On the other hand, the price of assets can rise practically indefinitely, offering possible profits of more than 100%.
If you are specifically opting for crypto, why might an investor or trader wish Bitcoin (BTC) or a particular altcoin to go down in price, even if they are optimistic about the crypto industry overall? One reason could be their position. If a trader is bearish against BTC and expects prices to fall, they can take a short trade with BTC and so logically would like their price to go down as they would benefit from the decline in the asset.
Traders can even be bearish in the short term and bullish in the long term, or vice versa. For example, you can expect the price of Bitcoin to decline over a period of days or weeks, but ultimately to rise and return to an upward trend lasting several months.
Investors or traders may also have a bearish short-term and a bullish long-term view and want lower prices in the short term in order to buy certain assets at relatively cheaper prices. Conversely, a market participant can have a short-term optimistic view with a long-term bearish outlook. They may believe that prices will rise due to hype or other factors, and buy or buy for the short term in the long term, while ultimately expecting to sell their positions at some point believing the market is a bubble or something like that.
It is important to note that the definition of short term and long term in markets can be subjective.
A look at what could create a bullish or bearish bias
Any person’s bullish or bearish view is likely to be based on a variety of components such as charts, news, and general knowledge. A market participant may consider Bitcoin or an Altcoin to be bearish for a period of time based on certain chart conditions or patterns.
You can also retire assets after negative announcements, such as B. a certain government regulation measure, bearish in the longer term. One could be bullish for a period based on an upcoming event like the start of bitcoin futures trading on the Chicago Mercantile Exchange in 2017.
People can also have a general bearish or bullish view of an asset as a whole. Michael Saylor, CEO of MicroStrategy, sees Bitcoin as a new way to store value. Gold attorney Peter Schiff, on the other hand, sees Bitcoin as a bubble.
Hence, many factors play a role in different parts of the upward and downward movement. Time frames, perspectives, opinions, and events can all affect a person’s outlook for an asset or asset class. Ultimately, each individual has to come to their own conclusion about what they think.
