The term bull market refers to a positive trend in the prices of a market. It is broadly used not only in the cryptocurrency space but also in the traditional markets. In short, a bull market concerns to a strong market uptrend that presents meaningful rising prices over a relatively short period of time. When compared to traditional markets, cryptocurrency markets are smaller and consequently more volatile. Therefore, it is quite common to see strong and consistent bull runs, where a 40% price increase in 1 or 2 days is quite common.
Historically, there have been a number of factors that contribute to the emergence of a bull market. In traditional exchange markets, a strong gross domestic product (GDP) and low unemployment numbers are some of the factors that often produce favorable market conditions, causing investorsโ confidence to increase. These factors can also create an indirect impact on the cryptocurrency markets, but as the crypto space consists of a smaller niche, it tends to behave in a particular way and is not always correlated to traditional markets or economic indexes.
Economists say that between 1929 and 2014, there have been 25 bull markets and 25 bear markets in the US. The average bear market loss was -35%, while the average bull market gain was roughly +104%. These trends reflect how market momentum sustains the continuous price increases (on bull markets) and decreases (on bear markets).