When Is the Next Crypto Bull Run?
If you are reading this, you probably just experienced one of the worst starts to the year for financial markets. Both traditional and digital assets have taken a hit, and the current economic situation in the world proves that we might be nowhere near the end. While this current market cycle provides another opportunity to buy cryptocurrencies at a reduced cost, the question most investors are asking is, “when is the next crypto bull run?”
This article will explore what is a bull run in crypto, make the next bull run prediction, and explain several arguments for and against our thesis. Let’s get started.
What Is a Bull Run in Cryptocurrency?
A bull run in crypto is a term used to describe a continued or abrupt increase in the market price of the cryptocurrency market when there is more demand than supply. Although the bull market term applies to all markets, we will explore how it pertains to the cryptocurrency market in particular.
Another way to explain the bull market succinctly is through sustained growth. This often happens when the market sentiment shows optimism in the economy, prices reflect the investors' confidence, and demand is more than supply.
Investors who believe cryptocurrency prices will increase are called bulls. These investors’ buying decisions could spark positive reactions from other investors, leading to a loop of sustained upward movements.
These upward movements could be sudden or progressive depending on several factors and could last for years. Some circles in cryptocurrency tag a 20% increase in the prices of cryptocurrencies from its most recent low as the accepted range for the start of a bull run.
The opposite of the bull run is called the bear run. Although bear runs can be a great opportunity to invest at lower prices because they provide better insight into risk tolerances and give traders a chance at a better entry price or reduce their average costs, few people can stomach seeing losses on their investments.
Several factors, besides an obvious supply and demand issue, can cause or affect a crypto bull market, but we can categorize them into two: psychological factors (per type of investors) and external factors. Let’s explore some of them.
Under the psychological factors (per type of investors), we have:
Retail Investors
As the crypto ecosystem matures, we are seeing more retail involvement. This is driving crypto market growth and the development of the crypto economy. As earlier said, retail investors, capitalize on fickle market sentiment and media awareness. When there is optimism and increased buyers' confidence that the market conditions favor a cryptocurrency bull run, retail investors start buying. The ripple effect of having many buyers at once makes the price of cryptocurrencies shoot up.
2021 Bitcoin Bull Run is led by
The Activity of Whales
The activity of whales also determines if there will be a bull run or not. Whales are a generic name to describe large cryptocurrency holders. Using complex tools, whales can make sound decisions concerning when to sell or buy. Before, or right into, a bear market, most whales move their tokens from volatile cryptocurrencies to stablecoins or fiat currency. The moment whales start moving into volatile assets, it is perceived that a bull run will soon start. Fortunately, it’s possible to track whales’ activities thanks to the transparent nature of blockchain.
Under the external factors, there are:
Regulations
The cryptocurrency space is largely unregulated, and different countries remain neutral and polarized in their opinions about digital assets. When regulatory decisions favor cryptocurrencies, the market reacts to the news by moving up. A recent example of this can be found in 2021 when China banned crypto mining and related activities. There was a short downturn that reversed once the US SEC accepted the first Bitcoin futures ETF in the country.
Economic Conditions
Inflation is one common fact in countries that see mass adoption of cryptocurrencies. Most countries are experiencing financial crunches, and to protect their capital from the devastating effect of inflation, citizens are saving their money in digital assets. Although cryptocurrencies have not proven to be a hedge against inflation, their volatile nature means they can move up easily as more people buy them, compared to fiat currencies that hardly recover from the effect of inflation.
Scarcity
The Bitcoin halving is a process that occurs every four years (every 210,000 blocks). The relevance of Bitcoin halving is to reduce the supply of new Bitcoins being mined and force the law of demand and supply to take effect. On top of this Bitcoin's maximum supply is capped at 21,000,000 coins, which limits the supply part of the equation.
From history, most Bitcoin bull runs happened the following year after a Bitcoin halving. The cryptocurrency market as a whole reacts positively to Bitcoin’s bull run.
List of Past Cryptocurrency Bull Runs
1.2010-2012
Bitcoin’s first taste of the bull run occurred between 2010 and 2011. Bitcoin was invented in 2009 to provide an escape route from the spending excesses of the government that led to the 2008 housing crash. The massive bull run would not come until 2011 though when it moved an astonishing 3200% in less than 9 months. The bull run was short-lived, though, as Bitcoin dropped to $2 in November. By a bit of chance, it ended the next year (2012) on a 650% increase from its November 2011 lows. Although the 2011 drop was unexpected, a 650% in 2012 is not one that can be easily seen in commodities or stocks.
2.2013
By 2013, there was already budding interest in Bitcoin. The price rose from the $100s price to a record-high of $1100. It plummeted to $438 and went through a bear run for the next three years.
3.2017
A year after the 2016 Bitcoin halving, the cryptocurrency took off from $900 in January 2017 to hit a record $19,783 in December of that same year. Although a few days before Christmas, it saw a 45% dip down to $11,000. Ethereum, created just two years prior, experienced its first bull run from $45 to $1,396.
The volatility continued and has become a norm in the cryptocurrency market. A Bitcoin increase more often than not spurs a rally in the wider cryptocurrency market.
4.2021
The latest cryptocurrency bull run we experienced was in 2021. It has been one of the biggest cryptocurrency bull runs ever, not just for its impact in lifting Bitcoin to almost $70,000, but for its impact on altcoins. Ethereum increased by 400%, Binance coin increased by 1500%, Solana increased 8000%, and Dogecoin rallied by 12,000%. So, is the crypto bull run of 2021 over? Yes, since we have seen a steady price drop of over 50% for the large caps and even more severe dips in smaller alts. Let’s focus on the next bull run though and explore factors that could anticipate it.
Factors That Might Delay a Crypto Bull Run
The crypto market is unpredictable, and past performance does not always guarantee future returns. It is impossible to time the market accurately, but there are several things investors can look out for in the economy that will point to when a cryptocurrency bull market will happen or when a bear market might be prolonged.
Several factors can contribute to the strength or start of a cryptocurrency bear market; a pandemic, wars, a slow economy, and a bubble are a few of these factors.
The Macro Economy
The crypto market reacts when an economy is slowing because of inflation, poor employment statistics, or low disposable income. With the record-high money printing over the last two years, the Fed has begun a quantitative tightening to curb inflation in the United States. Removal of liquidity from the market has ensured all markets are experiencing crunches.
Wars
Like it is commonly said, wars don’t determine who is right. They decide who’s left. When large nations fight each other, they impact other countries both politically and economically, due to the globalized nature of the world economy. A good example is the Russia-Ukraine crisis.
Regulatory Backlash
With the general stance on cryptocurrencies still unknown, a nation’s regulatory stance against cryptocurrency can delay the next bull run. For example, China’s ban on crypto mining activities affected the cryptocurrency market.
Crypto winter
The crypto winter is a term coined for major cryptocurrency crashes. After a sharp bull run, or right before a meteoric bull run, the cryptocurrency market tends to retrace and move sideways for a while.
The first time this term was used was in 2014 when the price of Bitcoin dropped 84% (from $1137 to $184) before starting a meteoric crypto bull cycle the year later. Although this was the fourth time Bitcoin’s price would be suffering a price shock, the duration by which the bear market lasted was what earned it the name ‘crypto winter.’
The second occurrence of a crash of this magnitude was in 2018 after the crypto bull market dropped 65% ($20,000 to $7,700) and went through an eighteen-month bear cycle.
The Next Crypto Bull Run Prediction
After reaching all-time highs in November, prices have since been on a steady decline. This has led to a lot of selloffs and FUD (fear, uncertainty, and doubt) in the space. Is the crypto bull run over? Or when is the next Crypto bull run? This has been the question flying around lately.
As we earlier stated, no one knows when the next bull run in crypto will be. The founder of Ethereum, Vitalik Buterin, has indicated that bear market cycles will benefit the crypto space in the long run because they allow projects to be built with little or no focus on price and speculations.
Some say that we won’t see a bull run in 2023 because of many factors. The optimism in the market is that the Bitcoin halving will signal the start of the bull run in 2024, while some others predict that following history, we would see the next bull run in 2025, a year after the Bitcoin halves.
The majority of the community members seem strongly convinced that there will be another bull run soon and that the bitcoin price prediction of $100k might not be far-fetched.
Takeaway
- Bull markets and bear markets are what make the market healthy.
- Bitcoin tends to rise the year after its halving.
- With hazy crypto regulatory oversights across many nations, some swing movements might be in reaction to regulatory news.
- Large crypto holders, also called whales, can preempt and influence a bull market.
- Generally, a benchmark of at least 20% upward movement is widely accepted as a bull market.
*This communication is intended as strictly informational, and nothing herein constitutes an offer or a recommendation to buy, sell, or retain any specific product, security or investment, or to utilise or refrain from utilising any particular service. The use of the products and services referred to herein may be subject to certain limitations in specific jurisdictions. This communication does not constitute and shall under no circumstances be deemed to constitute investment advice. This communication is not intended to constitute a public offering of securities within the meaning of any applicable legislation.
