In the world of cryptocurrencies, the term "Bullrun" or "bull market" is used to refer to a period of rapid and steady increases in the prices of cryptocurrencies.
During these periods, feelings of excitement and greed prevail, and investors rush to buy out of fear of missing out (FOMO), driving prices to new all-time highs.
The Bullrun is a cyclical phenomenon, often linked to a major event such as the reduction of Bitcoin mining rewards (the "halving") or the introduction of positive regulations or widespread institutional adoption of digital currencies.
One of the most notable examples of this was in 2017 when Bitcoin reached nearly $20,000 for the first time, and then in the Bullrun of 2020-2021, when its value exceeded $60,000, driven by major companies like Tesla and MicroStrategy entering the market.
The technical reasons behind the Bullrun:
1. BTC Halving: Reduction of Bitcoin mining rewards:
The "Halving" event (the halving of Bitcoin mining rewards every 4 years) is one of the main technical drivers of the Bullrun.
This event reduces the new supply of Bitcoin, leading to higher buying pressure against lower supply, and thus a price increase, especially if it coincides with an increase in demand.
2. Institutional adoption:
The entry of major financial institutions or technology companies into investing in digital currencies (such as Tesla, BlackRock, and MicroStrategy) sends strong signals of confidence to the markets, attracting more individual investors.
3. Network enhancements and new technologies:
Major technical upgrades, such as Ethereum's upgrade to Proof of Stake, or the launch of Layer 2 networks like Arbitrum and Optimism, enhance scalability and reduce fees, thus increasing network usage and supporting prices.
4. Liquidity and market stimulation:
Sometimes, the expansive monetary policies of central banks (such as lowering interest rates or printing money) drive investors to look for alternatives that preserve the value of their money, such as Bitcoin. This factor was evident after the Corona pandemic in 2020.
Characteristics of the Bullrun:
Upward momentum:
During a Bullrun, trading periods are characterized by significant momentum, and prices often exceed known technical resistance levels.
FOMO (fear of missing out):
As prices continue to rise, new investors quickly enter out of fear of "missing the train," which increases the upward momentum.
Rise of alternative currencies (Altseason):
After Bitcoin's rise, liquidity often shifts to alternative currencies like Ethereum, Solana, and Avalanche, in what is known as "Altseason," where some currencies achieve massive profits in a short time.
Warnings and strategies:
Although the Bullrun represents a golden opportunity to make profits, it carries high risks, especially for beginners. Violent corrections are common, and declines can reach 30% or more within a few days. Therefore, it is important:
Use risk management tools such as Stop Loss.
Avoid emotional or impulsive trading.
Diversification of investments to reduce exposure to losses from a single currency.
Do not invest money that you cannot afford to lose.
✨️ Summary:
The Bullrun in crypto is not just a temporary wave, but a phenomenon driven by technical, market, and economic factors.
Understanding these dynamics helps you make smarter investment decisions, whether you are a beginner or at the start of your journey in the world of digital currencies.