5 Indicators of a Bullish Crypto Market

One of the first things that a cryptocurrency trader will learn to watch out for is the viability of their chosen market. Perhaps the easiest way to sum up the direction of one’s crypto fortune is whether the market looks to become bullish (on an upward trend) or bearish (on a downward trend). 

Though bearishness is the less desirable outcome between the two, it’s often easier to know when the market is bearish versus when it’s about to enter a bullish period. The wise trader is always on the lookout for signs of bullishness towards the end of a market bottom. This gives them the benefit of leverage over their trading activities once others have started to believe in crypto anew. 

Knowing when a bullish period is about to begin will give you a significant advantage when trading in cryptocurrency like Monero (XMR) with an XMR wallet. Here are five signs to watch out for, as well as some advice on your crypto trading strategy for both bullish and bearish periods.  

Crypto Companies Are Hiring and Expanding Their Operations

The coins themselves aren’t the only things you should watch when trying to predict either a bullish or bearish period. It’s also important to observe the movement of people and the upsizing or downsizing of crypto operations. Massive layoffs, financial losses, or forks are reliable signs of bearishness in the crypto market. But the opposite is also true: if you see evidence that crypto companies are hiring en masse, expanding their operations, or investing in technological upgrades, then a bullish period may be afoot. 

Crypto’s Market-Value-to-Realized-Value (MRVR) is High

Another dependable sign of bullishness in the crypto market is high market-value-to-realized-value, or MRVR. MRVR is a metric that reveals whether a crypto asset is performing above its fair value (in the money), exactly at fair value (at the money), or below its fair value (out of the money). If you’re using crypto trading tools to analyze trends in your chosen market, be sure to watch out for this particular metric. Higher MRVR values can be a sign of late-stage bull cycles and an opening for you to trade more aggressively.  

Crypto’s Short Term and Long Term Moving Averages Converge in a “Golden Cross”

Experienced traders make it a point to look at crypto price movements across both the short term and the long term, typically over a period of 50 days for the former and 200 days for the latter. If a promising short-term moving average carries over into the long term, it can result in what’s called a “golden cross.” That means that the short-term gains have favorably “crossed” over into the long term, and that crypto traders may see a continuing uptrend in their coin prices. 

Crypto’s Momentum Has Stayed Consistent Across a Longer Period

Momentum is also a good indicator of either a bullish or a bearish crypto market. Traders often monitor a metric called the moving average convergence divergence (MACD) to zero in on the momentum of a coin price. MACD is considered a more accurate predictor of bullish trends compared to mere surges in crypto prices; as seasoned traders may know, high coin prices on one day won’t necessarily translate into higher prices the next day.

To make a call on whether your coin will be bullish in the coming months, see if its momentum has been consistent. You can afford to be more optimistic about your trading behavior if your coin hasn’t stagnated or gone through erratic ups and downs over a short period. 

More Traders Are Buying Crypto versus Selling It

Lastly, you may be able to anticipate a bullish period for your coin of choice if you see more traders buying new assets versus selling off the ones they already have. You should also look out for the adjacent green flag of frequent high-value transactions. If a lot of traders seem to be buying in large amounts across longer periods, that means that market trust is high and that the market is becoming increasingly liquid. These are optimal conditions for you to trade your crypto assets at higher prices. 

Final Words

As the saying goes, good things don’t last forever. But neither do bad things, especially for a market as dynamic as that of crypto. The world of cryptocurrency continues to surprise investors in terms of how quickly it can evolve and how often lucrative opportunities can strike. Even market droughts have the potential to turn themselves around and become profitable periods for the most patient traders. 

But as with any trading activity, the goal is to be observant and to have a proper foundation for one’s decisions. This definitely applies to your trading strategy for crypto, whether you’re situated in a bullish market or a bearish one. Take note of what’s happening in the market, trade with a cool head, and never let hype about bullishness or panic about bearishness influence your decision-making.

That approach should be effective in weathering through the downturns—and, on the opposite end, capitalizing on the upswings.