The bullish market, just like the bearish market, is one of the concepts we frequently encounter in economic bulletins. We can see the way in which economic developments are conveyed with phrases such as bulls gaining power, bulls victorious. So what is the bullish market? What should we understand when it comes to the bullish market?
What Is a Bullish Market?
The bullish market is a concept used for financial markets where prices are rising and the upward trend is expected to continue. This concept is not limited to the forex market and is also used for other capital markets.
There is an optimistic mood in the bullish market. Prices are expected to rise. With good news, demand increases and buyers emerge more than sellers. For this reason, prices also increase gradually. When looking at the bullish market chart, you will see a bullish trend.
The bullish season usually occurs in 3 stages.
The first stage is the collection stage. At this stage, the mood is still on the rise. There is no generally prevailing optimistic picture. However, the irrational sales made by the dealers who are at a loss, who are discouraged and who are at a loss are collected by big investors. Then the market begins to revive.
In the second stage, there is a buying wave. Optimistic mood prevails in the market. Now, small investors also contribute to the buying wave by participating in the upward trend. Transaction volume gradually increases.
The third stage is a more speculative stage. In this stage, newcomers also take their places in the market predominantly. The biggest motivation of them is that everything goes up quickly. The third stage can be described as the saturation stage. At this point, the market reaches a certain transaction volume and saturation. Prices swell. There may even be times when it inflates more than worth, that is, a balloon, in such cases, the balloon can burst and enter a hard bearish season.
The reason it is called the bullish market is that the bulls lift up with the movement of the horns while attacking. The rise in prices is used for the bullish metaphor.
So When Does the Bull Market (Season) Begin?
In general, it is seen that the past price movements are taken into consideration when the bullish season is entered. However, analysts generally comment on whether the bullish season is at the beginning of the upswing. We can say that the bullish season is with the news that will affect the market volume. Facebook’s libra news or Paypal’s entry into the cryptocurrency industry were all the opening news of the bull season. There were also cases when the same news started the downside of the bear season such as when China said they will not use bitcoin and Facebook’s libra project encountering legal obstacles.
SEE ALSO: What Is Bearish Market in Forex?