Bull market in cryptocurrencies: indicators, phases, and impact on investors

Cryptocurrency quotes, like any other volatile asset, may decline for months or years — such a market is called a "bear market." However, after any period of decline, a rising trend follows — a "bull" market.

What is a bull market?

A bull market in the cryptocurrency sector is a prolonged period during which digital assets exhibit a stable, wave-like upward trend, despite local declines (corrections).

A bull market is usually characterized by rising trading volume and general investor optimism, as reflected in sentiment indicators such as the Fear and Greed Index and data on exchange inflows/outflows.

According to analysts, the beginning of a bull market is marked by price growth of 20% or more relative to the latest maximum or minimum.

The term "bull market" is used because, during this period, buyers — the "bulls" — dominate among traders. One hypothesis suggests that the term "bulls" spread in the 18th century after the publication of pamphlets by Scottish satirist John Arbuthnot, in which a protagonist with the head of a bull named John Bull opposed a "bear" during a stock exchange transaction.

The term "bulls" became popular among traders because the animal's behavior resembles that of buyers. Bulls attack from below and lift their opponent upward, just as buyers "push" the price of crypto assets higher.

A bull market can last several months or even years, depending on internal factors in the crypto market and the broader economic environment.

Specifically in the cryptocurrency sector, a bull market typically begins with the rise of Bitcoin, the main digital asset by market capitalization. Following Bitcoin's sustained growth, other cryptocurrencies — altcoins — begin to demonstrate similar dynamics. A bull trend in the altcoin market is also known as "altseason."

An example of a bull market in the cryptocurrency sector is the period from January 2023 to October 2025. During this time, the total crypto market capitalization increased more than fivefold — from $798 billion to $4.20 trillion.

Factors influencing a bull market:

1. Overall economic conditions. A bull market often occurs during improvements in economic indicators such as GDP growth, falling unemployment, and increased industrial activity.
2. Fiscal and monetary policy. For example, a decrease in U.S. Federal Reserve (FOMC) interest rates lowers the yield of more stable financial instruments and increases investors' appetite for risk.
3. Favorable geopolitical situation, driven by the absence of tensions between major countries and stabilization on the international stage.
4. Positive news background. This includes publications on significant investments (e.g., Strategy's Bitcoin purchases) or on institutional inflows into crypto ETFs.

Finally, psychological factors also influence a bull market. Typically, such periods begin with purchases by large and institutional investors, followed by retail investors.

Phases of a bull market

Like a bear market, a bull market unfolds in four main phases. However, while a bear trend begins with "optimism," a bull market starts with the "pessimism" phase. The pessimism phase is the transition period from a bear market to a bull market.

During this stage, the rate of cryptocurrency decline slows, pessimistic sentiment among traders gradually decreases, and investor optimism begins to return. An example of the optimism phase of a bull market is the end of 2022, when the cryptocurrency sector reached a two-year low after the collapse of one of the largest crypto exchanges, FTX. In November, market capitalization sharply fell from $1.03 trillion to $824 billion, after which stagnation continued until the end of the year, and at the beginning of 2023, the trend reversal started.

After "pessimism," the second phase of the bull market begins — "skepticism." During this period, cryptocurrency prices had already started to rise, but many investors remained uncertain about the prospects of digital assets and hesitated to invest. In the skepticism stage, market participants may believe that the growth is unjustified and that a decline may continue. The skepticism phase in the crypto market lasted from January to October 2023: during this time, market capitalization grew only from $798 billion to $1.15 trillion, returning to 2022 levels.

However, if a significant decline does not occur, investor confidence returns and the next bull-market phase begins — "optimism." During this period, cryptocurrency prices show steady growth, with the pace gradually accelerating.

The optimism phase of the bull market lasted from October 2023 to November 2024: during this period, the crypto market capitalization nearly doubled, from $1.15 trillion to $2.24 trillion.

As cryptocurrencies approach their all-time highs, the final phase before correction and the beginning of a bearish trend arrives — euphoria. This is a period when prices may continue to grow rapidly, even in the face of negative news.

Typically, euphoria in the crypto market is caused by the psychological effect of FOMO (Fear of Missing Out). This happens because investors succumb to emotions and rush to buy assets even when they have already risen significantly. For example, after Bitcoin set a new all-time high (ATH) at $70,000 in April 2024, and after a brief correction, the price of the first cryptocurrency continued to rise, reaching $126,000 in October 2025.

More experienced traders, on the other hand, begin taking profits and closing long positions in the futures market during this period, anticipating an upcoming correction.

To reduce risks of a potential correction after the euphoria phase, experts recommend following basic risk-management principles:

• Diversify your portfolio: allocate funds across a range of assets, not just cryptocurrencies.
• Create a financial reserve to maintain flexibility in the market.
• Hedge positions to compensate for losses during crypto market declines.
• Stick to the HODL strategy (long-term investing) and avoid panic selling.
• Analyze market conditions independently and follow the opinions of experienced analysts.

How to determine that a bull market has begun?

One of the key indicators signaling the start of a bull market is increasing trading volume occurring alongside rising cryptocurrency prices. Both factors indicate a growing demand for cryptocurrencies.

Additional indicators include sentiment indexes such as the Fear and Greed Index. Typically, during a bull market, this indicator is above 50 out of 100. In the later phases of a bull market, the index may exceed 75. For example, in November 2024, when Bitcoin reached a new peak, the index rose to 89.

It is also worth paying attention to the overall background, which should be positive. This applies to both news and expert opinions, as well as economic conditions on the international stage.