Looking at the bitcoin price can be confusing. It’s up for the week, down for the month, but up for the year. Is bitcoin in a bull market? How long do bull markets last? Should you buy now or wait? These are some pretty common questions!
The truth is, there’s no precise definition of a bull market, and no specific metric to look at to determine if we’re in a bitcoin bull market. Hindsight is always 2020, but in the moment, the fog of euphoria makes it hard to know for sure.
Of course, rising price is the main indicator of a bull market, but how much, and how quick, and for how long?
That’s why I don’t buy bitcoin based purely on whether we’re in a bull or bear market. I stack bitcoin because it’s my savings account, and I try not to pay too much attention to market conditions. Of course, as someone who writes about bitcoin weekly, it’s hard not to notice when the market jumps 20% in a day, but the point is that I try my best not to buy based on market sentiment.
For me, a bull market is not indicated by anything concrete. There’s no specific number or measurement I look at to determine if the bull is awake. For me, my indicators are more socially focused, and usually only obvious in hindsight. From my perspective, here are my top 3 ways to know if bitcoin is in a bull market.
3 Ways To Know If Bitcoin Is In A Bull Market
1. Your Net Worth Doubled In A Week
I’ve lived through two bitcoin bull markets, and it’s pretty insane. Bull markets really are like a drug. There’s nothing like checking your phone every five minutes and watching your net worth grow right in front of you. Literally. You can watch the value of bitcoin go up 20%… then another 20%… in just a few minutes.
In the 2017 bull run I remember waking up every couple of hours throughout the night to check my phone just to see if we were still going up. I’d wake up and just refresh my phone every 5-10 minutes. Who needs to sleep when you’re getting rich?
Looking back, it was obviously unsustainable, but as with all drugs, a raging bull market changes how you think and makes you illogical. Suddenly 100% gains in a week don’t seem like a whole lot. You start thinking about what would happen if the price doubles. Then doubles again. Then doubles again. Easy. Just a few more months of this and you get a house, or a car, or retire.
Almost there. OK we’re there. Just a little more. OMG it’s still going.
The 2017 bull run pretty much began in May 2017 and lasted until December 2017. That’s just six months for the market to do 20x from about $1,000 to $20,000 USD per bitcoin. If you measure from the bottom of the 2015 bear market, the price ran up 100x over 3 years, from $200 to $20,000.
20x from the current price of $30,000 would be $600,000 per bitcoin. A 100x multiple would mean $3,000,000 per bitcoin. Stop me. I’m getting bullish again.
The price of bitcoin is volatile. Sometimes it goes up a lot, but as a general rule of thumb, if you see your net worth double in a week or two, it’s probably a bull market.
2. Pundit Price Predictions Go Off The Rails
Another thing I noticed that the 2017 and 2021 bull markets had in common is that pundits, influencers, analysts, and commentators are also super caught up in the hype as well. Their price predictions pretty much go off the rails, and probably feed the bull market euphoria.
In late 2017, popular investors and crypto influencers were predicting prices between $50,000 and $250,000 to hit by 2018-2022.
Then, in 2021 as we blew past $20k on our way to $60k and above, the laser eyes meme was born. #laserraystil100k was the trending hashtag. It was only a matter of time before we memed our way to a six figure bitcoin price. Max Kaiser famously predicted $220k by the end of 2021.
Well, despite the stock-to-flow model confirming all this bullishness, here we are in the middle of 2022, sitting at a mere $30,000 per bitcoin.
Just remember that if you are hearing wild predictions about bitcoin’s near-term price movement, that there’s no penalty for a wrong guess, but if you make financial decisions based on where bitcoin “should” be in the future, there’s a chance you’ll end up in a bad situation.
In addition to nutty price predictions, I think that celebrities entering the space and endorsing certain projects or starting their own is a great indicator of euphoria in the market. In 2017 we had stuff like Floyd Mayweather and Kim Kardashian launching ICOs. In 2021 we had Jimmy Fallon buying Bored Apes and Mark Cuban getting rekt on DeFi tokens.
3. Normies Start Talking About Bitcoin
Normally, most people don’t really care that much about bitcoin. Personally, I love talking about bitcoin, and the best I can get out of anyone is a one or two sentence blip about recent news. Digital money? Oh cool. Have fun with that. I don’t really get it.
I guess people just don’t think about money or investing that much, or there are just not that many people who are interested in the cross-section of money, politics, technology, history, and science fiction.
You know what normies love though? Meme stocks. Holy shit. When $AMC and $GME were massively pumping it was all anyone could talk about. Yeah, I bought a few shares just to see what happens.
You know what normies love? Dogecoin. When $DOGE was pumping, it was the thing that people joked about. OMG did you see the news about that funny dog coin? I think it’s going to a dollar!
Of course, nobody wants to hear about nodes or decentralization or this history of money. PRICE PUMP is what brings normies to the conversation.
So if suddenly people are asking you questions about bitcoin, or the grocery bag boy starts asking you how many bitcoin you have, we might be in the midst of a bull market. I guess I can’t blame people. I got in right at the start of the 2017 bull market, so I guess I was buying into hype as well. Luckily for bitcoiners, there’s substance behind the hype, so each bull cycle there’s a group of bitcoiners who stick around and learn what this bitcoin stuff is all about.
The only thing to do in this situation is to educate the people who are asking, and hopefully they’ll stick around through all the future rips and dips.
Do you have a sudden interest in bitcoin and are asking your bitcoin friend lots of questions? Are you asking Google if we’re in a bull market because this is your first time buying bitcoin? It’s possible that you are the signal and we could be on the cusp of a fresh bull market!
We’ve Been In A Bull Market Since 2009
Bull markets in general are pretty short compared to bear markets. While bear markets can last for years, bull markets typically only last for a couple of months. The 2021 bull run lasted just six months, from November 2020 to April 2022. In 2017 it was the same: six months. The 2013 bull run lasted three months, from September to December.
Over a period of 13 years, could you have guessed when those runs would have started, and when to buy or sell, precisely at the correct moment? Most people cannot.
If you focus on the week-to-week or even month-to-month changes in bitcoin’s price, you’ll go crazy. Look at years and decades instead. I like to think about early bitcoiners and the markets they had to ride from 2009 until the top price of $69k in 2021. That’s 13 years of holding bitcoin. If you want to repeat their success and become wealthy with bitcoin, you have to put in the time. That means if you’re buying bitcoin in 2022, you need to hold until 2035 if you want to HODL like an OG bitcoiner!
Rather than aim to guess when the next bull market begins, I like to look at the entire history of bitcoin and imagine what it may look like in the future. I believe that due to bitcoin’s predictable, unchanging, and desirable monetary properties, more people will eventually wake up to the fact that they should own at least a little bitcoin. As more people want bitcoin, the price will rise.
From 2009 until now was simply one continuous bull market. Those bear markets were just temporary dip on the way to global hyperbitcoinization. I think we’ll continue to see that trend play out over the next few decades. I don’t try to guess when the bear or bull starts. I see bitcoin’s price as a continuous move “up and to the right” as it becomes the most trusted store of value of any asset.
Bitcoin was designed to pump foreverMatt Odell
Why I Prefer Bear Markets
I actually prefer bear markets to bull markets. I mean, don’t get me wrong. Becoming wealthy is very cool. However, bull markets are full of a lot of bull-shit. People act crazy. It’s stressful. It’s hard to concentrate on work. Everything is just about money and wealth.
When the bear market hits you start to see who’s really going to stick around.
Bear markets are for buildingBitcoin Axiom
During a bear market, it’s actually kind of depressing watching your wealth plummet 80% from its all time high, so you stop looking at the price as much. You have to fill your time with something, but you can’t stop thinking about bitcoin. So you start to imagine ways to get more bitcoin. Build a business? Start a side hustle? Sell some stuff I don’t need? Time to get to work!
You talk to other bitcoiners. You spend time listening to podcasts. You build a node. You go to a meetup. In the end, you end up learning more about bitcoin and become more confident. You start to see all the bullshit in the crypto space like ICOs, DeFi, and NFTs. Then you become a bitcoin maximalist.
With a long term time horizon, a 1-3 year bear market is just a temporary stop on the road to catch your breath, stretch your legs, and get energized for the next pump. Bitcoin is a marathon, not a sprint. Intense bull runs are fun but they are also distracting. The main thing is to stay focused for decades. Short term thinking is for traders. Long term holding is for creating wealth.
The #1 Mistake I Made During Bull Markets
I want to offer you some parting advice before we finish out this article. The #1 mistake I’ve made during BOTH bull markets I’ve experienced is that I started making financial choices based around the temporary bull market conditions. Luckily I never did anything really stupid like get over leveraged and actually lose any of my bitcoin stack, but I did set myself back a couple times by getting caught up in bull market hype.
The first time was in 2017 was when I got a fat bonus check from a company I was working for and I dumped it all into a market-buy in the first week of December. I didn’t buy the top of $20k, but I got somewhere in around $18k. My thinking at the time was, “Why not just double this paycheck by putting it into Bitcoin. Easy. Just wait a couple months.” Obviously, that didn’t turn out. Shortly after we dumped into the low 10’s range, and then bottomed at around $3k. On hindsight, I should have started with a smaller purchase considering all the hype at the time.
The other time I got caught with my pants down during a bull market was when I sold a bunch of stocks to buy bitcoin after we dipped from $63k down to $57k. I thought it was the dip, but the dip still had more dips. The money I spent then could have been used to buy 2x the amount of bitcoin now that we’re sitting at $30k. Of course, no one can predict where the market is going to go, but I think the mistake was buying into market euphoria instead of buying when market sentiment is low.
My mistakes weren’t that bad. I simply have less bitcoin than I could have otherwise had. I’ve seen people on Twitter make bigger mistakes and lose their life savings trying to trade bitcoin markets with leverage and the market moves against them. This is how people get liquidated and lose all their bitcoin.
The lesson here is that with every bitcoin purchase, you should buy with the idea that the value could go down by 50% the next day. If you start making important financial decisions during a euphoric bull run, it’s possible you could be very disappointed with the results.