Bull Run periods in financial markets do not follow a fixed duration (months or years). They are influenced by various economic, political and technological factors. Here is a guide to understand their beginnings, their ends, and the stages that make them up:
1. Start and end of a Bull Run
Beginning :
A bull run usually begins after an extended period of declining or stabilizing prices. This occurs when positive events boost investor confidence, such as:
The adoption of new technologies (e.g. the integration of cryptocurrencies into payment systems).
Improved regulation or a favorable legal framework.
Encouraging news, such as the acceptance of cryptocurrencies by major institutions.
END :
The Bull Run ends when:
Prices stagnate, then begin a prolonged decline.
A speculative bubble causes assets to be overvalued relative to their real value.
Large investors (whales) are withdrawing from the market, leading to massive selling.
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2. The stages of a Bull Run
Phase 1: The Start (Stealth Phase)
Prices are still low, and only smart money investors are buying.
Signs: Little media attention and a gradual increase in prices.
Phase 2: Early Adoption (Awareness Phase)
The market attracts the attention of ordinary investors.
Signs: Appearance of positive news and moderate increase in prices.
Phase 3: Euphoria (Manic Phase)
Prices are rising rapidly.
Signs: High trading volume, new investors driven by fear of missing out (FOMO), and unrealistic expectations like “prices will never go down.”
Phase 4: Turnaround (Deflation Phase)
The market peaks, followed by a sharp decline.
Signs: Significant price fluctuations, increased negative news, and mass selling.
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3. How to detect the end of a Bull Run?
Here are the indicators signaling a possible end of the bull market:
1. Overpricing:
Prices become excessively high compared to their real value.
A speculative bubble forms if “everyone” is talking about cryptocurrencies.
2. Excessive media attention:
When cryptocurrencies dominate headlines every day, it may indicate a top.
3. Increased volatility:
Frequent and violent price fluctuations over a short period of time are a warning signal.
4. Sales of whales:
Large wallets are starting to liquidate their assets, often visible through tools like Whale Alert.
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4. Strategies to minimize losses
1. Set an exit goal in advance:
Schedule your sales when you reach a certain profit percentage.
2. Practice micro-selling:
Sell your assets in several stages rather than all at once to take advantage of successive increases.
3. Use technical indicators:
Analyze the market with tools like RSI (Relative Strength Index) or moving averages.
4. Avoid emotional decisions:
Don't let FOMO influence your choices. Stay rational.
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Conclusion
Bull Runs don’t have a specific timeline, but often appear after quiet or bearish periods. Understanding what stage of the market you’re in requires following news, technical analysis, and investor behavior. Always plan your exits with strategies based on reliable data, not emotion or excitement of the moment.
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