Bull Run in Crypto: What Does It Mean and How It Works | LiteFinance (2024)

Everything you need to know about bull run in cryptocurrency landscape: meaning, concerns, forecast

Cryptocurrencies have experienced remarkable price volatility since their inception, characterized by dramatic rises and falls. One such phenomenon is a bull run, which refers to a period of time when cryptocurrency prices rise rapidly.

At just over 100 words, this opening paragraph introduces the concept of a bull run in the cryptocurrency market and contrasts it with bearish trends, setting the stage for a more in-depth discussion to follow in the subsequent paragraphs.

Key Takeaways on Bitcoin Bull Runs

1. Bitcoin has seen massive previous bull runs every 4 years after halving events which cut miner rewards in half – 2013, 2017, 2021 (over 5x price gains in months).

2. Bull runs have tended to peak within 12-18 months (late 2013, late 2017, early 2021) before entering bear markets.

3. Severe corrections have followed historic bitcoin bull run peaks, with prices falling 77-85% over 1-2 year periods.

4. The next bitcoin halving is projected for March 2024, which could ignite the next major bull run accelerating in 2024 and peaking in late 2025 per past cycles.

5. However, investors should avoid repeating past mistakes during frenzied bull runs – overinvesting, going all-in on peaks, failing to take profits – given ongoing adoption uncertainties.

6. Caution is still warranted around regulatory crackdowns and macroeconomic conditions extending crypto volatility and potential crypto winter scenarios.

Historical Crypto Bull Runs

The crypto market has experienced several dramatic bull runs in its short history, especially for the two largest crypto assets – Bitcoin and Ethereum. Bitcoin saw massive bull runs in 2013 when prices went from around $100 to over $1,000 driven by growing mainstream interest.

Another epic Bitcoin bull run occurred in 2017 when prices skyrocketed from under $1,000 to nearly $20,000 in under 12 months before declining. This was likely driven by factors like the approval of Bitcoin ETFs, increasing regulation, more acceptance by financial institutions and payments companies, as well as speculation.

Ethereum also saw a monumental bull run in 2017 when prices exploded from around $10 to over $1,400 within a year. The crypto bull runs have often coincided with bitcoin halving events every four years – when the bitcoin reward for miners gets cut in half. The reduced supply helped drive further bitcoin price increases.

For example:

• Bitcoin saw a large bull run for most of 2020 and early 2021 after its May 2020 halving. Bitcoin prices went from around $5,000 to over $60,000 driven by institutional investor interest, mainstream adoption advances like Visa and Paypal supporting crypto payments.

• Since hitting all-time highs, a crypto bear market has brought Bitcoin prices back down below $20,000.

• Many crypto bulls remain optimistic and predict the next Bitcoin halving in 2024 could spark another massive bull run with predictions Bitcoin could reach $100,000 or more while Ethereum prices could triple.

• However, regulators cracking down on certain crypto exchange practices as well as macroeconomic uncertainty could delay the next major crypto breakout for 1-2 more years.

Drivers and Signals of a Crypto Bull Run

There are several key market fundamentals, events, and trends that typically precede and signal an oncoming crypto bull run. Major catalysts include regulatory approval of spot Bitcoin ETFs, increased institutional investor interest, major companies offering crypto services, and past bitcoin halving events reducing supply. For example, each bitcoin halving reduces the block rewards miners receive, helping drive up prices while growing mainstream adoption signals more demand.

Other bull run signals include:

• Mainstream companies like PayPal, Visa, and Fidelity supporting crypto payments and services.

• Large institutional investors and hedge funds investing in crypto.

• Retail investor interest swelling as seen through crypto IRA account offerings.

• The launch of new crypto ETFs and SEC approval of spot Bitcoin ETFs.

• Greater retail and institutional investor interest with each bitcoin halving event.

If fundamentals line up and these signals accelerate, many experts predict the stage could be set for the next major crypto bull run to ignite within the next 1-2 years, especially around the next bitcoin halving projected in April 2024.

Risks and Considerations

While crypto bull runs generate huge profits for some investors, major risks remain that all investors should weigh carefully, including:

1. Assets becoming extremely overvalued. Crypto valuations often detach from technical fundamentals during bull runs, leading to a correction.

2. Regulatory crackdowns. Governments could ramp up crypto regulations, banning certain activities.

Major volatility. Crypto prices have seen >50% drawdowns even after major rallies, wiping out gains.

Due to these risks, investors should be careful not to overextend holdings in case a bear market emerges. For example, Bitcoin prices fell over 80% in 2018 after immense 2017 gains. And the 2022 crypto crash led to a >60% Bitcoin and Ethereum sell off. While more adoption could propel a mega bull run, regulatory and volatility risks could also lead to another crypto winter.

As such, caution is warranted when investing in such a historically volatile young asset class prone to periodic major drawdowns and bear trends even amid general long-term growth.

Avoid Repeating Past Mistakes

During past epic crypto bull runs like in 2017 and 2021, many investors threw caution to the wind in overexcitement, overinvesting at market peaks before massive 80-90% crashes occurred. When assets become detached from underlying value and euphoria reigns, it rarely ends well. Yet in the frenzy of making quick gains as prices skyrocket, discipline and moderation tend to disappear.

Investors would be prudent to learn from past mistakes where unfettered greed led many to financial ruin after bubbles inevitably burst. By reflecting on previous bull run pitfalls, establishing balanced portfolio targets, taking profits on the way up, and sticking to initial strategy, investors can aim to avoid past errors and prepare for the next inevitable crypto winter.

Forecasting the Next Bull Run

Based on historical patterns and bitcoin's four-year halving cycles, many analysts predict the crypto market is primed for another major bull run in 2024. Quantitative models forecast the bull run could last 12-18 months and bring even greater returns than the epic 2021 rally. For example, the Stock-to-Flow model predicts Bitcoin could reach over $100,000 in the next cycle peak. This implies nearly a higher gain from previous year’s lows.

Ethereum price predictions range from $10,000 to $20,000+ in the next bull market based on momentum indicators and historical trends pointing to another explosive advance. Top crypto exchange CEOs like Changpeng Zhao and Sam Bankman-Fried also anticipate the crypto bull run resuming in 2024 or 2025, driven by growing web3 and Metaverse adoption paired with resolve of recent industry scandals.

However, the precise timing remains difficult to forecast definitively due to macroeconomic uncertainties with recessions and interest rate hikes possible through 2024. Nonetheless, if historical cycles repeat and models prove prescient, investors may witness epic new highs within 18-24 months with the next bitcoin halving and maturation of blockchain technology acting as key catalysts. Maintaining perspective through any turbulence will be critical to capitalize on the projected parabolic advance.

Preparing for and Maximizing a Bull Run

Here are some tips for investors to maximize opportunities during an extended crypto bull run while avoiding common pitfalls:

1. Stick to predefined rules and targets. Set price levels for taking profits rather than getting swept away by euphoria or panic.

2. Cost average over time. Steadily accumulate positions instead of chasing sudden pumps.

3. Keep portfolio diversified. Rotate between quality assets rather than going all-in on one coin.

4. Utilize dollar cost averaging. Make regular, automated buys to smooth out volatility.

5. Take some profit off the table. Resist temptation to become an extreme holder, trim positions on the way up.

Don't FOMO at peaks. Exercise patience for inevitable pullbacks to regain footing before next step up.

By tuning out hype, avoiding emotional decisions, and focusing on long-term strategy, investors can maximize substantial gains during bull runs while minimizing downside risk. The key is balanced moderation and a disciplined perspective.

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.