How can you predict Bulls and Bears beforehand?
Before diving deep into the art of being the fortune teller of the bulls and bears of the crypto market, let us understand what bulls and bears in the market means.
Simply put, “bullish” is used when it is believed that the value of a cryptocurrency or the overall market will go higher. Conversely, “bearish” is the term used when it is opined that the value of a cryptocurrency will go down, or the market as a whole will underperform.
Now that we know what bullish and bearish markets mean, does the crypto market not seem like a lawless land where these two creatures; namely, an aggressive bull and a lethargic bear, are set loose? And these two go about on their own will, pulling up or bringing down the prices and the market, with utter disregard for any of the textbook trading patterns, indicators and techniques.
As convincing as this theory might sound, upon looking at how volatile the market is, there actually exist some things that you can observe and keep track of in order to predict if the market will act bullish or bearish.
Staying up to date with the news is the key!
Yes, you read it correctly, keeping track of the news related to a particular cryptocurrency and its parent organisation is a very important factor in anticipating if there might be a bullish or a bearish trend in the market. Not only that but also being aware of the cryptocurrencies that are being talked of in the social spaces, plays a major role.
Occurrences, news and things to look out for include periodic conferences organised by the cryptocurrency’s parent organisation, announcements regarding the introduction of some platform upgrade or incorporation of a new or improved protocol in their system and mentions of the parent platform or the cryptocurrency by some influential personality.
Let us see how we can analyse a news or an event, in order to predict if the market is going to act bullish or bearish.
Instances where the market got influenced because of some influential person.
Cardano’s ADA skyrocketed for the first time in the month of May, 2021 when the Tesla CEO, announced that the company shall no longer be accepting Bitcoins because of the hefty toll it takes on the environment when new Bitcoins are mined. The crypto market as a whole came crashing down afterwards and is recovering still, but this also made the investors invest in more environment friendly coins like ADA. This made the coin’s value to skyrocket, which is in compliance with the simple demand and supply principle.
It is also very well known that the value of DOGE coin keeps on fluctuating with the amount of attention and tweet-mentions it garners from the Tesla CEO. In the past, everytime Elon Musk mentioned DOGE coin in his tweets, its value has gone up substantially, and has even doubled one of the times.
Instance where the market was affected after some announcement.
ADA had caught the eye of the investors in the month of May, 2021 itself because of its environment friendly nature. To top that off, in August it was revealed by Cardano that they shall be launching their smart contracts, the Alonzo Hard Fork, followed by the date when it shall take effect. This chain of events has made ADA grow by more than 1400%. Such announcements regarding technical upgrades result in a bullish trend due obvious reasons like confidence on the platform, more security and better trade due to incorporation of better infrastructure.
Similar was the case with IoTex, which witnessed an overall growth of 600% in August 2021 itself, after announcing their own NFT marketplace and a decentralized trading platform called uTrade v2 which has features like allowing users to list coins by themselves on the platform and more developer friendly smart contracts to name a few. This was followed by listing of IoTex on Coinbase which led to it growing by more than a 100% in a course of 2 days. What can be observed here is the incorporation of promising technical upgrades in the platform led to the token getting listed on Coinbase and catching the eye of the investors.
When the XRP token’s parent company Ripple announced that they might be facing an SEC lawsuit on the basis of which they intend to sue Ripple for selling unlicensed securities, the cryptocurrency’s prices took a downfall as no one wants to be on a sinking boat. The reason for this is quite simple, when the investors sensed that the days ahead might not be so sunny for the cryptocurrency’s parent company, as there are equal chances of them getting or not getting acquitted, they sold their holdings due to which the prices went down.
So we gather that
- If the mentions in social spaces are made in an appreciative sense like the Tesla CEO’s tweets regarding DOGE coins, it sends the cryptocurrencies skyrocketing towards the moon and hence a bullish trend.
- If the mentions are in a derogatory sense which is his another tweet regarding the negative environmental impact of Bitcoins, it made the entire crypto market go down crashing, and hence a bearish trend.
- One must keep a look out for announcements regarding promising technical upgrades and “hard forks” as they result in a bullish trend in the respective cryptocurrency’s trade.
- Any sort of bad press, that is news regarding lawsuits, or any legal proceedings usually bring down the market as the trust of the masses go down, hence a bearish trend.
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