So, you’ve decided to buy Bitcoin. Now, what’s the best way to invest in this currency? What are the risks of buying into a crypto bull run? How do you identify when a crypto bull run is coming? This article will cover the basics and help you make the right decision. It also discusses what triggers a bull run in crypto and what you should watch out for. Read on for an explanation of the different types of cryptocurrencies and what you should do if you’re thinking about buying in.
Bitcoin’s bull run
There is a lot of speculation about the next leg of Bitcoin’s bull market. According to a report by Nickel Digital Asset Management, a London-based FCA-regulated investment firm, the top 100 global institutional investors increased their allocations to cryptocurrencies in the last year. Almost all of these firms are bullish on their long-term target allocations toward BTC. Increasing institutional adoption of finite Bitcoin will likely be the catalyst for the next leg of Bitcoin’s bull run.
In recent weeks, the price of Bitcoin has continued its upward trend. This bull run started after two halvings. The first occurred in 2012, when the price rose from $11 to $12. It then increased to $1,075 by November. In December, it broke the previous record, hitting $17,000. Several major banks and other institutions are now considering accepting this digital currency. In addition, the Wall Street Journal is reporting that more institutions are embracing cryptocurrency.
This is despite the fact that many cryptocurrencies experience large-scale panic selling after market corrections. While long-term bitcoin holders may not have sold their coins after the price dropped to over $60,000, those who bought during the bull market are buying again. Miners have also begun adding to their holdings again. After China banned bitcoin mining in the country, they were net sellers. The ban has also affected mining operations, which are now shifting to other countries.
Risks of buying into a bull run in crypto
If you’re worried about the risks of investing in cryptocurrency, you’re not alone. Most experts advise keeping your cryptocurrency investments below 5% of your overall portfolio to protect against market volatility. Bitcoin is the oldest cryptocurrency and its price has seen many major drops over the years, but it always recovers to new highs. If you’re unsure whether to invest in crypto, consider starting with a specific sector and developing your investing skills.
Traders should keep a watchful eye on price movements. There are two main types of bull runs – gradual and sudden. A bull run is a long-term upward trend in prices, while a bear run is a sudden increase of more than 20%. The former is beneficial for the market, but bear runs can rein in over-exaggerated bull runs. They also give traders a clearer picture of their risk tolerance. They can buy at lower prices and take advantage of the market’s bull run.
Bear markets are characterized by extreme volatility and can last for years. This can be caused by a weak economy, geopolitical crises, or wars. Even worse, a bull market can turn into a bear market if some big news is released. A bear market can also occur if the price of the cryptocurrency falls dramatically. In such situations, you should be prepared to exit your position quickly.
Triggers of a bull run in crypto
A bull run in cryptocurrency prices can be triggered by a few things. First, there must be a favorable market. Economic, political, and social factors can influence cryptocurrency prices. When a positive climate is present, investors are more likely to buy the crypto assets. As a result, the prices will rise. In addition, cryptocurrencies are faster than traditional assets, making them a good place to cash out when the market starts to decline.
The reason for a bull run is varied, but it usually involves a surge in investor confidence and optimism. The biggest trigger is the halving of Bitcoin, which is a common event in the crypto space. Investor confidence drives the continued rise of prices and fuels the bull market. However, other factors can cause a bull run as well. There are also other triggers for bull runs, such as the emergence of new technologies and the rising price of established assets.
Institutional investors are a significant factor in the recent bull run. According to Bloomberg, a handful of key investors can trigger a bull run. For example, MicroStrategy holds 121,044 bitcoins, which if they sell them would lead to a spike in supply and a resulting bull run. Some analysts believe this lone whale fueled the bitcoin surge in 2017.