What are Bearish and Bullish?

If you’re an experienced trader, these terms are more than familiar, so you can skip this article. If you are a beginner, stay right here, you need to understand what bearish and bullish mean.

Let’s start with the definitions

In stock market (cryptocurrency market included),  the terms “Bullish” and “Bearish” indicate the direction of the trend. A trend called “Bullish” means that the price is increasing. Conversely, a trend called “Bearish” means the price is declining over a fixed period of time.

These terms are metaphors

“Bullish” comes from the word “Bull”. It’s actually a metaphor. Indeed, this animal attacks its enemies from the bottom up, using its horns.

Bearish comes from the word Bear, based on the image of this wild animal. In fact, the bear defends itself from top to bottom facing its assailants.

Causes and consequences

When the market is Bullish, investors have high confidence and increase their investments. Therefore, the offer becomes weaker than the demand. As the demand is greater, the price the of the stock (or coin) increases, because the same original available amount of stocks is wanted by more people who want to buy.

When the market is Bearish, investors are more pessimistic and fear a crash. As a result, demand becomes weaker than the offer, leading to a fall in prices. Investors want to sell their shares. Since the offers on the market become abundant, investors must lower their prices, usually followed by a domino effect.

Illustration

Conclusion

Two minutes ago you had no clue of what it was all about. As you can see it wasn’t that hard to understand. Now, these words make sense and you can start having fancy talks with other investors but remember one more thing: Don’t invest money you can’t afford to lose.