The terms bearish and bullish will often be heard by those who enter the world of capital, stock, and crypto asset markets. Therefore, these two terms are essential to be known by investors—especially beginners—who enter the investment world, especially crypto assets.
These interrelated terms often describe market sentiment towards market conditions, especially price movements. On the other hand, by knowing these two terms, investors will be calmer in responding to price volatility in the crypto market.
Then, what exactly is bearish or bullish? Let’s look at the following review.
Bearish and Bullish History
These two terms have been around for centuries, with several versions.
1. History of the Bullish Market
Below are three emerging theories regarding the history of the term bullish market.
- a. Bull Attacks
In this version, 1714 is considered a milestone in the history of the bull market. However, the origin of this term itself is uncertain because there is no detailed discussion of this issue in several pieces of literature.
It is known here that there is a theory originating from how the bull attacks its enemy. Usually, the bull will lower its head, then thrust its horns upwards to overthrow its enemy.
The crypto market can be seen when the market is low and starts to climb positively.
- b. Bullblood Sport
The following theory dates back to the late 1500s, to be precise, from the Elizabethan era. That said, a bloody game called “bull baiting” took place throughout the year.
This cruel game will show the audience a spectacle of a bull chained, then attacked by several dogs. Finally, this brutal and cruel game was stopped in 1835.
By some people, it is the bloody game that is considered the beginning of the emergence of the term bullish.
- c. The Bull Board
The London Stock Exchange, a financial institution founded in the 17th century, is credited with being a pioneer in the creation of this term. The presence of The London Stock Exchange is also in line with the initial formation of the time in 1714.
For that period, traders will place a buy offer on the exchange’s announcement board, called a “bull.” However, there was not much demand for the stock at that time, so the board was “empty.”
2. Bearish Market History
- a. Bear Attacks
The term bear market also comes from around 1714, like a bullish market. The first theory about this, in terms of terminology, is from how the bear attacks his enemy. The bear will swing its claws downwards and tear its enemy. This then became a symbol of the downtrend in the bear market.
- b. Bear Baiting
The rationale for this theory is almost the same as the previous theory. “Bear baiting” itself dates back to the late 1500s. At that time, bears were chained up and attacked by dogs as a public entertainment game.
- c. The Bare Board
When the London Stock Exchange was just founded, there was a board that became a place for traders to submit offers to buy shares. When stock demand is low, this board will be empty and create the term “bear” as a term for a down market condition.
- d. Bearskin
Selling fur was a way for people in the 16th century to make a living. Sometimes, they will involve intermediaries to make buying and selling.
Related to that, these clever sellers will sell bear fur they don’t have. In this case, they would only guess the price to be paid to the bearskin hunter.
Two centuries later, investors are known to start selling shares that do not belong to them. The practice of short selling was then known as “selling the bearskin,” based on the history of this activity.
What are Bearish and Bullish?
In general, bullishness is when the market, especially crypto assets, is experiencing an uptrend (strengthening). This increase can be influenced by economic conditions in a country, even throughout the world, which is experiencing economic growth.
Meanwhile, bearish is a condition when the stock market is experiencing a downtrend (weakening). The decline was influenced by slowing economic growth, even lower than the previous year.
The bull is symbolized by the bull, while the bear represents the bear. This means that if the bulls win, the market will automatically go up, while if the bears succeed, the market will go down.
Market Conditions Called Bearish or Bullish
- 1. Bear market
A bearish market is a situation that will indicate that the value of crypto assets is starting to decline. In this condition, the price of an asset decreases 20%, or more, within a certain period (two months or more).
Bearish conditions generally occur in countries that are experiencing an economic recession. In this situation, the economy will slow down, and the unemployment rate will also increase because many workers have been terminated. Bear market conditions can also get worse with government policies such as changing the percentage of taxes.
- 2. Bullish Market
In contrast to a bear market, a bull market is a condition that reflects the situation in the crypto market when asset values ??tend to rise. It also shows that economic conditions usually run well, and all parties can benefit, even novice traders.
Considering that the crypto market is also influenced by investor behavior, a bullish market is closely related to an investor’s optimistic attitude toward the current economic trend.
As for the country scale, the economy shows strengthening. For example, it can be seen from the increase in the value of GDP and the low unemployment rate.
Thus, you need to know a review of bearish and bullish in the world of crypto assets. Happy trading!