Crypto markets? They’re a rollercoaster. You can see fortunes appear – and vanish – in the blink of an eye. Just a single tweet or a new regulation can send prices sky high. On the flip side, unexpected global events, like trade wars, can trigger market collapses, wiping out billions in what feels like minutes. This wild ride is exactly why we talk about “bull” and “bear” markets in crypto – they really define the cycles we go through.

Getting a handle on these market trends isn’t just about timing your buys and sells – it’s honestly about staying in the game. While the basic ideas behind bull and bear markets are straightforward, they play out in complex ways. Think of it like this: a bull market is pure energy – optimism takes over, people are ready to take risks, and prices climb. A bear market? That’s when fear creeps in, everyone starts selling, and investors really get tested.

So, in this article, we’re going to break down exactly what these bull and bear market conditions are all about, and more importantly, how they impact the world of cryptocurrency.

Defining bull and bear markets

Now, in the old-school stock market world, a bull market usually means stock prices are on a steady climb for a good chunk of time – think months, even years – and they’ve jumped up by 20% or more. Crypto bull and bear markets work pretty similarly to traditional finance, with a few important twists. What makes crypto different, and often amplifies these market cycles? It’s these things:

• Crazy volatility – prices can swing wildly.
• Trading never stops – it’s 24/7, always on.
• Less liquidity – it can be harder to buy and sell without moving prices a lot.
• No safety net – unlike some markets, there aren’t circuit breakers to hit pause when things get too hectic.

So, how do crypto investors even try to make sense of it all? They lean on things like technical charts, macro-economic trends, and on-chain analysis to spot patterns and navigate these market ups and downs.

Mike Marshall, head of research at Amberdata, told Decrypt, “You can use classic technical analysis tools – things like moving averages, the RSI (Relative Strength Index), and Bollinger Bands. They can help you see when market cycles might be shifting, especially if you look at other markets like the NASDAQ and tech stocks at the same time.” He added, “But big picture stuff matters too – things like what the Federal Reserve is doing, inflation levels, and global events all really impact crypto cycles.”

Let’s imagine it’s January 20, 2025. Bitcoin hits a record high of $108,786! The buzz? Hope for friendlier crypto rules in the U.S. under a re-elected President Trump, who’d promised a Strategic Bitcoin Reserve.

Some experts started saying, “This is it, a bull market!” Some even called it a “supercycle” – like, a really long period of growth driven by constant demand and super-positive investors. But then, just two months later, reality hit: Bitcoin plunged over 31% to around $73,000.

Alice Liu, Head of Research at CoinMarketCap, mentioned to Decrypt at ETH Denver, “Everyone seemed to think the new Trump administration would be a massive boost for crypto regulations.” But, she pointed out, “So far, we haven’t actually seen that turn into real action.”

However, as Liu clarified, this Bitcoin price drop didn’t automatically mean a bear market had taken over.

She explained, “This looks more like a temporary dip, a ‘technical pullback,’ not a fundamental shift in the market. Why? Because the market’s still liquid, there’s still plenty of buying and selling happening.”

Liquidity – basically, how easy it is to buy or sell assets without causing big price swings – is super important for telling bull and bear markets apart. High liquidity? That means the market’s healthy, trades are flowing, and prices are relatively stable because there are lots of buyers and sellers. In bear markets, though, liquidity tends to dry up as people stop trading, which makes prices jump around even more.

Liu pointed out, “Even when the market reacted to that shock, we still saw a big jump in trading volume, averaging about $150 to $160 million every day.” She continued, “And even now, after things have calmed down a bit, we’re still seeing a good amount of trading activity in the market.”

Signs of a crypto bull market

• 📈 Prices keep climbing: You see major cryptos – Bitcoin, Ethereum, Solana, you name it – consistently rising week after week, month after month.
• 💸 More trading and investor interest: Everyone’s buying! Both regular folks and big institutions are jumping in, showing they’re confident in the market.
• 🤑 Good vibes all around: You can just feel the optimism. It’s everywhere – on social media, in the news, from analysts. This often leads to FOMO (fear of missing out) driving even more investments.
• ⛹️ Breaking through barriers: When Bitcoin and other big cryptos push past their previous highest prices, that often kicks off even more upward momentum.
• 😎 Crypto is booming everywhere: Things like DeFi, NFTs, and blockchain gaming are getting bigger and more active. This tells you crypto is becoming more widely adopted and invested in overall.

Pinpointing the exact start of a Bitcoin bull market? Tricky. Experts don’t always agree on the signs. Some say it begins when prices bounce back from a big dip, while others are like, “Nah, it’s only a bull market once we break past the old record highs.”

Michael Terpin, founder and CEO of Transform Ventures, told Decrypt, “Technically, you could argue a bull market starts right after the market ‘capitulates,’ when prices start to recover. But most people don’t really see it as a bull market in Bitcoin until it’s blown past the previous all-time high, and then lasts until things get bubbly, about a year later.”

Capitulation? That’s when investors, often panicking or just fed up with losses, give up and sell off everything. It usually happens after a long period of market decline, often triggered by a major shock, like when FTX collapsed back in November 2022.

Signs of a crypto bear market

• 📉 Prices keep falling: Major cryptos are in a long-term downtrend, often dropping 20% or more from their recent peaks.
• 🛌 Trading slows down, investors lose interest: Not much buying happening, lots of people are selling or just sitting on the sidelines, waiting it out.
• 😬 Everyone’s feeling negative: Fear, uncertainty, and doubt – what they call “FUD” – takes over social media, news headlines, and expert predictions.
• 🎢 Can’t get past hurdles: Bitcoin and other cryptos struggle to recover, bouncing off resistance levels repeatedly without breaking through.
• 💤 Crypto activity cools off: Less hype around DeFi, NFTs, and blockchain projects, fewer transactions happening on-chain, and overall network activity drops.

Those investors who hang onto their crypto even during a bear market, despite everyone telling them to sell, they’re known as having “diamond hands.”

On-chain indicators for market cycles

• Market Value to Realized Value (MVRV) ratio: This compares the overall market cap to the ‘realized’ cap. A high ratio might suggest prices are due for a drop, while a low one could mean things are undervalued.
• Spent Output Profit Ratio (SOPR): This tracks whether people are moving coins for a profit or a loss. Above one? People are taking profits (bullish sign). Below one? Selling at a loss (bearish).
• Puell Multiple: This looks at miner revenue compared to historical averages. High values can signal market tops, while low values might mean miners are giving up – possibly hinting at market bottoms.
• Hold On for Dear Life (HODL) waves: These show how long people are holding onto their coins. More long-term holders? Often points to bear markets. Declines in long-term holding? Could mean people are distributing coins during bull runs.

Now, not every finance expert agrees that a 20% price swing is the magic number for deciding if we’re in a bull or bear market.

David Duong, Head of Institutional Research at Coinbase, told Decrypt, “That standard 20% rule for bull and bear markets that works in traditional finance? It might not fit crypto as well. Crypto prices just move way more dramatically, and since it’s 24/7, crypto’s more sensitive to everything happening globally.”

Duong explained that crypto often acts as a stand-in when traditional markets are closed, which can make price reactions in crypto even bigger.

“I tend to look at things like the 200-day moving average, combined with how long an upward or downward trend actually lasts,” he said. “How long does a price move sustain itself? That’s key to figuring out if it’s really a bull or bear market.”

So, while crypto markets do share some things in common with traditional markets, they’ve definitely got their own unique vibe. Things like extreme price swings, being super hyped-up, and regulatory changes really make them stand out.

“For crypto-specific indicators,” Duong mentioned, “I like to use the Market Value to Realized Value ratio, or the MVRV z-score. That helps me get a sense of where markets are headed.”

Investor sentiment and market trends

How investors are feeling really shapes market cycles, and there are indicators that give us clues about the overall mood. Things like the CBOE Volatility Index (VIX), the Put/Call Ratio, and the AAII Sentiment Survey – they all help measure investor confidence and how much risk people are willing to take.

One popular one is the Fear and Greed Index. It combines different market factors to see if investors are leaning more towards being cautious (fear) or excited (greed). The index goes from 0 to 100. Lower numbers mean fear, suggesting investors are nervous or bearish. Higher numbers show greed, signaling optimism and a bullish market.

On March 30, 2025, when I’m writing this, the Crypto Fear and Greed Index is at 32 (Fear). It’s gone up from 17 (Extreme Fear) earlier in the month. These indices don’t predict the future prices, but they often reflect bigger shifts in how investors are thinking about the market.

Joe Vezzani, CEO and co-founder of LunarCrush, which tracks crypto sentiment, told Decrypt, “Investors often use sentiment as a key gauge to see if markets are about to peak or hit bottom.” He added, “Right now, crypto market sentiment is the lowest it’s been since August 2024, when things got volatile because of the unwinding of the yen carry trade.”

Financial analyst Jacob King, founder and CEO of WhaleWire, thinks market sentiment also comes down to whether people trust the data itself.

King told Decrypt, “There are indicators – if you even trust the data, which is questionable. Bitcoin dropping below the 200-day moving average is a major warning sign. When the bulls can’t hold that level, the market gets weaker, and prices can fall faster.”

Market cycles and long-term investing strategies

Markets naturally go through periods of growth and decline. No investment strategy is foolproof, but if you’re in it for the long haul and do your homework, you’ll be in a better position to weather the ups and downs of the financial world.

Mike Cahill, CEO of Douro Labs, told Decrypt, “You know, what makes a crypto bull market today isn’t just price. It’s also about real-world use, how mature the tech is, and how many big institutions are involved.” He added, “When you really get down to it, the important signs are: transaction volumes speeding up, fees growing, stablecoins moving quickly, and capital being formed on-chain. That’s how you know the next big wave is actually happening.”