The crypto market peaked at nearly $68,000 in November 2021 before experiencing a huge downturn a year later. As we approach Q4 2023, cryptocurrencies have undergone a remarkable resurgence. This has sparked curiosity among investors about the prospect of a prolonged upward trend.
Whether or not the crypto winter is over, savvy investors are gearing up for the potential next surge in the market. Your opportunity to build generational wealth may just be in the next crypto bull market.
But are we on the brink of a crypto bull market? Below is a guide that highlights how to spot and capitalize on the crypto bull market.
What Is a Crypto Bull Market?
A crypto bull market is an optimistic period marked by rising asset prices and expectations of continued growth. In the cryptocurrency market, a bull run has the following characteristics:
- Market confidence is high
- Investors have faith in the market’s growth potential
- Prices experience a continuous rise
- The majority of investors are buying, leading to increased demand
Investors in a bull market often anticipate rising prices. This optimistic outlook creates a positive feedback loop, attracting more crypto investments. As a result, it fuels further price increases.
Since investor confidence plays a huge role in determining cryptocurrency prices, understanding market sentiment becomes important. To strategize in a bull market, gauge the level of optimism among market participants.
Timeline of Crypto Bull Markets
Crypto markets often move in cycles. Understanding historical patterns and previous bull runs is invaluable in predicting signs of a new one. Several notable bull markets have occurred in the history of cryptocurrencies.
Let’s take a recap of the most significant ones and see what we can learn from them.
2011 – 2013: Bitcoin’s Geopolitical Surge
The journey began in November 2011, unfolding over 1.5 years, with Bitcoin’s value surging from $2.93 to $329. While this bull market wasn’t the first for Bitcoin, it stood out as the first to occur as a result of geopolitical factors.
The specter of the 2011 European Recession and the financial crisis in Cyprus triggered a search for alternative means to safeguard wealth. This led to the adoption of Bitcoin. It marked a pivotal shift, portraying Bitcoin as a refuge from faltering political and financial institutions.
The bull run comprised two distinct phases. In the first phase, Bitcoin witnessed an ascent from $2.93 to $10.26 in just two months. A brief 40% decline followed. However, it was eclipsed by the second climb from $7.60 to $19.48.
From there, Bitcoin’s price soared unabated, reaching a staggering $329 by April 2013. What made this run extraordinary was the triple-digit rally and the speed with which Bitcoin charged into the spotlight.
2015 – 2017: Bitcoin’s Mainstream Odyssey
The aftermath of the Mt Gox. & Silk Road bear market paved the way for Bitcoin’s resurgence. From August 2015 to December 2017, Bitcoin’s value surged from $329 to a peak of $27,666. This marked an 8309.12% increase.
The year 2015 saw Bitcoin hovering between $200 and $300. However, a turning point emerged in late August, propelling Bitcoin to $670 by December 2015.
A brief consolidation in early 2016 preceded a remarkable climb throughout the year before Bitcoin tripled to $4,350 by June 2017. By September, Bitcoin reached $7,000. This marked a 2000% increase from its starting point.
The final three months of this bull market witnessed an unprecedented 295% rally, culminating in a historic high of $27,666. This surge featured retail euphoria and mainstream coverage, breaking barriers that once confined crypto investing to a few investors.
2020 – 2021: A Digital Renaissance
The crypto stage witnessed its most recent act from September 2020 to November 2021. Bitcoin’s price skyrocketed from $14,346 to an all-time high of $91,363. This was a 536.85% increase.
The 2020-2021 bull market unfolded against the backdrop of the COVID-19 pandemic, accelerating the world’s dependence on digital payments. As a result, cryptocurrencies became more popular among:
- Brokerages (Robinhood)
- Corporations (MicroStrategy, Tesla)
- Central banks (JP Morgan Chase, Goldman Sachs)
- Countries (El Salvador)
The rise of the multi-billion-dollar NFT market played a pivotal role in drawing attention to Ethereum. It also signaled a new era of digital content production and exchange. The crypto space experienced phenomenal growth: Bitcoin from $14,300 in September 2020 to its peak in November 2021, and Ethereum from $702 to an all-time high of $9,386.
How to Identify Signs of a Bull Market
The cryptocurrency market is volatile and most investors anticipate a bull run. If you want to know when a crypto bull run is underway, here are key signs to watch for:
An obvious sign of a bull market is a huge and sustained increase in cryptocurrency prices. Major players like Bitcoin and Ethereum often lead the charge.
Their prices usually rise steadily or experience sudden surges. As a trader or investor, watch out for this uptrend as it signals a potential bull run.
Rise in Trading Volume
A bull run is often accompanied by a surge in trading volume. This heightened market activity shows increased participation from both seasoned traders and newcomers looking to capitalize on rising prices.
Monitoring trading volume can provide you with insights into the strength of the current market trend.
Affirmative Market Sentiment
During a bull run, crypto communities become filled with positive sentiment. The discussions usually revolve around bullish headlines and predictions. If you notice an optimistic outlook in the crypto market, prepare for the bull run.
Bitcoin Becomes Digital Gold
The narrative of Bitcoin as “digital gold” gains traction in a bull market. You will notice a lot of investors turning to it as a hedge against economic insecurity.
Usually, Bitcoin becomes a store of wealth, especially in times of inflation and economic instability. This tends to drive increased demand and higher prices.
While Bitcoin often leads the charge, a true bull run involves an increase in the prices of altcoins. Altcoins may outperform Bitcoin during certain periods, experiencing significant gains. The altcoin rally is a strong indicator of widespread market enthusiasm.
If you notice the entry of institutional investors, such as hedge funds into the crypto space, it may be a sign of a bull market. Their involvement not only adds credibility but also attracts more capital to the market. This tends to fuel the upward trend.
Involvement of New Investors
A bull run usually sees an influx of new retail investors eager to participate in the crypto market. The increased demand from new entrants can contribute to driving up prices. As a result, it can create a self-reinforcing cycle of growth.
Market Capitalization Growth
Notice the total market capitalization of the cryptocurrency market reaching all-time highs?
It may be a sign of the crypto bull market. This metric reflects the combined value of all cryptocurrencies in circulation. It also serves as a barometer for the overall health of the market.
Positive innovations in blockchain technology contribute to market optimism during a bull run. These innovations also boost confidence among investors, encouraging further investment within the crypto space.
In the coming years, blockchain’s enterprise adoption will revolutionize industries, enhancing system efficiency and security. Additionally, emerging blockchain voting systems promise transparent, secure elections. Key tech players like AWS, Google, and Oracle are also driving blockchain innovations.
Integration with IoT will ensure secure data exchanges, while AI collaboration will improve decision-making. Blockchain also streamlines supply chains and identity verification and invigorates gaming with decentralized organizations and valuable assets.
During a bull run, a lot of people may choose to hold onto their assets (HODL) rather than sell. This causes limited supply, leading to an upward price pressure since fewer assets are in circulation.
Fear of Missing Out (FOMO)
The crypto bull market is known for its gains. As a result, the fear of missing out on potential gains is a powerful psychological driver during this period.
You will notice investors who were previously on the sidelines rushing to buy in. This FOMO buying can create a sense of urgency and lead to the rapid escalation of prices.
Availability of Correction Periods
For cryptocurrency predictions, you should know that a true crypto bull run is not without its share of corrections. These healthy price adjustments allow the market to cool down and prevent overheating.
If you want to successfully navigate the complexities. Recognizing and understanding the role of correction periods is essential for navigating the complexities of a bull market.
Focus on the Long-Term Perspective
In a crypto market bull run, you will notice investors shifting their focus from short-term gains to the long-term potential of crypto. Additionally, there will be an emphasis on the revolutionary aspects of blockchain technology. This often attracts investors who see beyond the immediate price movements.
As the crypto markets peak, you will notice positive regulatory changes and endorsements by governments. This can help boost market confidence.
Clear and supportive regulatory frameworks provide a sense of security for investors. It also attracts institutional participation.
Is 2024 the Year for the Next Crypto Bull Run?
As we approach the end of 2023, there’s a prevailing sentiment that this year may serve as a bottoming year, setting the stage for the next bull run. Understanding market cycles, such as the Benner cycle, provides insights into why 2023 holds the potential for a favorable market bottom.
Here are some trends that may also make 2024 the next crypto bull run:
- Metaverse growth
- GameFi rebirth
- NFT resurgence
- DeFi expansion
- Physical asset tokenization
These trends collectively shape a dynamic landscape of crypto. As a result, it will foster innovation and attract diverse players.
How to Prepare for the Next Crypto Bull Market?
Preparing for the next bull market is essential. When you strategize your crypto investments, you can maximize potential gains while managing risks. Here are tips to help you capitalize on the next bull run:
Create an Investment Plan
Cryptocurrencies are unpredictable. To be safe, don’t dive headfirst into the crypto bull rally. Develop a comprehensive investment plan that outlines how you will allocate your funds.
Consider dividing your portfolio between blue-chip cryptocurrencies like Bitcoin, Ethereum, and altcoins. For altcoins, choose reputable industries that have potential.
Set Profit Targets and Stick to Them
One mistake most crypto investors make is not knowing when to take profits. Since cryptocurrency markets are driven by emotion and social media, it may be hard to regulate yourself without targets.
Make sure you establish realistic profit targets and adhere to them. This will help protect you from abrupt market downturns.
What’s more, ensure you have a predetermined exit strategy. If uncertain about exit points, consider a gradual approach using dollar-cost averaging.
For example, you can sell 25% of an altcoin at one price point and another 25% at the next. This ensures a methodical profit-taking strategy that allows you to get potential additional gains if the market continues to rise.
Diversify Your Risk
While Bitcoin and Ethereum are considered safer bets, many investors prefer altcoins since they’re higher risk-reward assets. However, don’t allocate a large portion of your portfolio to altcoins. You may expose yourself to an excessive downside.
Ensure you diversify your portfolio with a mix of high-cap cryptocurrencies and altcoins. This can help mitigate volatility.
Do Some Research
Make decisions based on research rather than yielding to hype or fear of missing out (FOMO). Ensure you research the projects you’re interested in. You can leverage free tools such as Arkham Intelligence and Crypto-fundraising.info for research.
Prioritize Risk Management
As an investor, calculate the amount you can afford to risk on your investment and each trade. Use stop-loss orders to limit your losses during market downturns. When you stick to your plan, you can prevent impulsive decisions, especially during market volatility.
Secure Your Investments
To protect your investments, use hardware wallets for storing crypto assets. Also, choose reputable exchanges with robust security measures. This will protect your assets against hacks and cyber theft.
Seize Opportunities in the Crypto Bull Market
The signs of a crypto bull market are apparent. As an investor, it’s important to approach opportunities with a discerning eye. This will help you maximize your profits.
Looking to capitalize on the next crypto bull market? Partner with TrueCode Capital. Our experts can help you navigate the market’s ups and downs, ensuring you secure investments. Get in touch with us today to get started.