Crypto enthusiasts are well-aware that cryptocurrencies are volatile assets; we’ve witnessed their dramatic falls and rises since their inception. Seasoned investors learned to take advantage of phenomena like bull runs because they tend to provide them with increased profit, suppose they know how to adapt their strategies to the period.
Bitcoin, the oldest and largest cryptocurrency by market cap, has experienced several bull runs, as it tends to go through such periods every four years after halvings when the miner rewards are cut in half. If we check its history, it’s easy to notice that bull runs peak somewhere between 12 and 18 months after a halving, when people buy Bitcoin in large amounts. The last halving took place in April 2024 and is expected to ignite a bull run at the end of the year, which could prolong into 2025.
Let’s go through the last bull runs
As mentioned earlier, the crypto sector went through several dramatic bull markets, and the largest cryptocurrencies, Bitcoin and Ethereum, featured the greatest spikes in price. One of Bitcoin’s most memorable bull runs was in 2013, when its value increased from $100 to $1000 in a short period as a result of the growing mainstream interest. The next Bitcoin bull run occurred in 2017 when it reached $20,000 before it went into the bear phase. The May 2020 halving triggered another large bull run from the end of 2020 until the first half of 2021, when Bitcoin’s value spiked from $5000 to $60,000. And as expected, the period was followed by a bear market that took the price back to under $20,000.
However, Bitcoin enthusiasts are optimistic and predict that the 2024 halving will spark a new bull run, which could lead to a spike in Bitcoin’s price that could overturn the previous ones.
What happens during bull markets?
Bull markets, regardless of their sector, are characterized by increases in assets’ prices. While the term was initially used to describe the phenomenon in the stock market, since the inception of cryptocurrencies it was also applied to the sector to delimitate market phases.
During a bull run in a traditional market, the assets’ prices would usually increase by at least 20% from their recent lows and maintain the same level for a prolonged period. Besides the price increases, the period is also characterized by investor optimism, confidence, low unemployment, and economic recovery, so it’s quite easy to figure out when a bull period starts. But not even history can tell how long this kind of period lasts because the factors that trigger it are diverse.
Is the bull run in the crypto market different?
The crypto market functions slightly differently than the others, and it’s advisable to fully understand it before making an investment. It mainly operates differently because it’s subjected to high volatility, and it’s quite young, so we lack a comprehensive history to try to identify patterns. Therefore, during a bull phase, it could experience rapid price increases, which could vary from 20% to over 50% in less than a couple of months. The duration of a bull run in the crypto market can also differ in duration, so it’s challenging to take the previous ones as a point of reference. A wide array of factors could influence its duration, from the tech advancements in the industry to the adoption rates of assets, market sentiment, and even regulatory news.
What strategies to use when a bull market is inching close?
Navigating the bull market while trying to invest in Bitcoin could prove challenging. However, a mix of market dynamics research, discipline, and the adoption of the proper strategies could prove helpful. Here are some trading strategies expected to increase profitability.
Buy and hold
This is one of the most popular strategies among investors because it allows them to make a profit from the long-term growth of crypto projects like Bitcoin. It requires buying Bitcoin during bear markets when it’s sold for a lower price and holding it in the portfolio until the market bounces back and the price spikes. It’s ideal to sell it during the peak of the bull run for maximum profit, which will imply tracking the market’s progress closely. This strategy is best used with crypto assets like Bitcoin and Ethereum because they have strong fundamentals (significant market potential, innovative underlying tech, and a solid development team).
Momentum trading
This strategy works totally differently than the previous one because it capitalizes on the idea that crypto assets stay in motion during the bull run. When Bitcoin starts growing in price during the bull phase, it maintains the same trajectory over a long period. If you want to navigate this period and make a profit, you might want to consider putting some money into momentum trading.
It’s a great strategy because it allows you to gain a return on your investment swiftly. It requires the use of clear trends and indicators to ensure that you make the most of it and that you can adapt it across the time frame you find suitable.
Swing trading
This is a niche trading strategy because it allows you to leverage the crypto market’s volatility by making gains from the swings of Bitcoin’s price over a day or week. It’s one of the most profitable strategies during a bull run because the general trend of the market is upward, and you can take advantage of multiple opportunities resulting from short-term fluctuations. You can analyze patterns to understand the trends of the market better and predict price movements.
Scalping
Another short-term trading strategy, scalping, is widely used by seasoned investors because it allows them to execute multiple trades within a single day. It’s highly profitable during bull markets because the increased volatility produces numerous opportunities. You will make a return on your investment from accumulating the profit from multiple small gains. It works greatly when Bitcoin has increased liquidity on the market.
