Bull Market

In crypto, bull markets are known for an extreme volatility that far outstrips that of traditional markets. Crypto bull runs see bitcoin dominance drop and liquidity cascade from bitcoin down through the altcoin market, driving rapid price appreciation across much of the space.

In traditional markets, a bull market is usually defined by a price increase of 20% or more from recent local lows. However, the cryptocurrency market operates on a somewhat different logic, meaning there is often some debate over precisely when its bull markets begin and end.

Analysts often look to a combination of price action and onchain data to make their calls, including MVRV (Market Value to Realized Value) and NUPL (Net Unrealized Profit/Loss). These can signal whether or not the market is overextended. Stablecoin inflows to exchanges are another core indicator, as this typically signals that investors are positioning to allocate capital into volatile assets.

Another commonly cited metric is the Fear & Greed Index, which combines multiple factors including price, momentum and investor sentiment into a single indicator. Bull runs typically result in higher average readings, signalling that market participants are allocating more aggressively. When this indicator gives a reading of ‘Extreme Greed’, markets are typically approaching the euphoria phase at the end of a major bull market.

Crypto bull markets have historically been tied to bitcoin halvings: the events that see the rewards paid out to BTC miners halved. This creates a supply shock that tends to precede bull markets by 12 to 18 months later. The effect of these supply mechanics can also be dampened or exacerbated by wider macroeconomic factors, such as central bank rate adjustments.