Bull and bear market
A bull market is a long stretch when prices broadly rise; a bear market is one when they broadly fall. There is no exact line; trend and sentiment define it.
How it works
The names come from how the animals attack: a bull thrusts its horns upward, a bear swipes its paw downward. "Bulls" are people who buy and expect a rise, "bears" are people who sell and expect a fall.
In stocks there is a rule of thumb: a drop of 20% or more from the high is called a bear market, and a 20% rise from the low marks a new bull market. Crypto swings harder, so people more often look at structure: in a bull market highs and lows keep rising, in a bear market they keep falling.
The market phase shapes strategy. In a bull market buying pullbacks works more often; in a bear market bounces often turn into traps. Every market has sharp moves against the main direction.
A coin climbs from $20,000 to $60,000 over eighteen months, making higher lows along the way: that is a bull market. Then it falls to $30,000, 50% off the high, with lower highs: a bear market.
In a bear market price drops from $40,000 to $30,000 and bounces to $34,000, about 13%. Many shout "the bull is back", but the new high is below the last one and the trend has not changed yet.
The most common mistake is calling a new market after one or two green candles and buying on FOMO. Check the higher timeframe: are highs and lows being made higher, and where is price relative to key levels. And a bull market is no guarantee: even there 20 to 30% corrections happen, so you always need a stop-loss and proper position size.
Questions and answers
What are bull and bear markets in simple terms?
A bull market is when prices rise broadly for a long time, a bear market is when they fall. Bulls buy, bears sell.
Why are they called bulls and bears?
A bull attacks by thrusting its horns up, a bear swipes its paw down. That gives the images of rising and falling.
How do I know a bear market has started?
In stocks people often use a 20% drop from the high. In crypto they usually look at structure: lower highs and lower lows on the daily or weekly chart.
Related terms
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Updated: 2026-10-19