Why do buyers in the market call themselves โbullsโ and sellers โbearsโ?
Letโs imagine how two large animals fight in nature, because thatโs where this idea comes from:
The โbullโ: โข When a bull attacks, it uses its horns to strike from the bottom up. This represents the upward movement in the market. โข Buyers are called โbullsโ because they believe the price will rise and try to โpushโ the market upward with their purchases.
The โbearโ: โข When a bear attacks, it uses its claws to strike from the top down, representing the downward movement in the market. โข Sellers are called โbearsโ because they believe the price will fall and try to โpullโ the market downward with their sales.
How does this work in the market? 1. Bulls buy when they believe the price will rise, trying to push the market upward. 2. Bears come in selling when they believe the price will fall, pushing the market down.
What happens when they โfightโ?
โข When bulls and bears are in balance, the market is stable.
โข But when one side is stronger, it โwinsโ:
โข If the bulls are stronger, the price goes up (bull market).
โข If the bears are stronger, the price goes down (bear market).
Where did this come from?
This comparison is an old one, dating back to the 18th century financial markets, when traders used these two animals as symbols to represent upward (bulls) and downward (bears) strength.
So, whenever you hear about bulls and bears in the market, remember how these two animals attack โ one from the bottom up (bullish) and the other from the top down (bearish). Itโs like watching a jungle battle, only on a market chart!
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content.ย See T&Cs.
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