What Happens in a Crypto Bull Run?

The cryptocurrency market operates in different phases during the crypto bull run. And it reflects patterns that were seen in the previous cycles. While each of these cycles gives an insight into the market’s behavior, they also show certain deviations. In the present bull run cycle, the market expectations have shifted to unforeseen developments and evolving trends. Here, we are going to check the major trends of the bull market, the recent deviations, and their implications for investors.

Key Takeaways

• Brief intro on the crypto bull run phase of the crypto cycle.
• Different phases of the crypto bull cycle.
• Factors influencing crypto market cycles.

Crypto Bull Run Phase 1: Bitcoin Leads the Market

The first phase of the crypto bull market typically observes Bitcoin leading the price appreciation. This stage is characterized by:

• Investor Confidence: Bitcoin, being the most popular and trusted cryptocurrency, acts as a gateway for the seasoned and the new traders alike.
• Capital Inflow: As Bitcoin gains momentum, significant capital flows into the asset and increases its price.
• Dominance in Market Capitalisation: Bitcoin’s market dominance often peaks during this phase. During this time, other cryptocurrencies, like altcoins, remain relatively stagnant.

ALSO READ: How high can Bitcoin go?

In the present bull cycle, Bitcoin’s rise was influenced by macroeconomic conditions and institutional interests. The approval of the Bitcoin exchange traded funds brought immense capital into the asset. This provided Bitcoin a solid foundation for growth and kept its dominance impact longer compared to other cycles.

Crypto Bull Run Phase 2: Ethereum and Altcoins Take the Stage

Traditionally, Bitcoin is followed by Ethereum to gain investors’ attention. This phase typically involves:

• Shift in Capital: Investors who have gathered Bitcoin during Phase 1 will diversify their holdings into altcoins with strong utility, including Ethereum.
• Ethereum Outperformance: In the past, Ethereum has shown higher performance returns than Bitcoin. It is due to the utility as a platform for decentralized applications, smart contracts and DeFi projects.

Why did Ethereum Underperform in this Crypto bull run?

Compared to previous cycles, this cycle saw a change in trend. Ethereum failed to perform due to the following factors:

• DUNCAN Update: Ethereum introduced the DUNCAN update, which aimed at bringing technical improvements. However, it turned Ethereum into an inflationary asset by increasing its supply. This change reduced its value and took away investors’ confidence.

• Large Scale Selling: After the update, Ethereum faced significant selling pressure. The investors cashed out, which led to a drop in demand and poor performance compared to expectations.

• Emergence of Solana: While Ethereum struggled, Solana emerged as a strong contender. Known for its low transaction fees and high-speed transactions, Solana attracted substantial attention from investors and developers and filled the gap left by Ethereum. Solana’s price increase further cemented its position as a major player in the market, and it drew a lot of capital away from Ethereum.

Crypto Bull Run Phase 3: The Altcoin Season

The third phase typically marks the rise of altcoins beyond Ethereum. Here the smaller cap cryptocurrencies experience a significant price hike. This phase is often characterized by:

• Rotation of Funds: Capital generally flows from Bitcoin to the smaller altcoins as investors always look for higher returns.
• Diverse Market Growth: A wide range of altcoins benefit from the established market projects.

ALSO READ: Best Altcoins to Buy in 2025

Deviations in the Current Cycle

In this crypto bull market cycle, compared to the previous ones, altcoins did not unfold as anticipated due to certain factors:

• Bitcoin ETF Launch: The introduction of Bitcoin’s ETF drew immense attention. It kept investors focussed on Bitcoin rather than the Altcoins, resulting in a limited capital rotation away from BTC, a departure from previous cycles.

• Concentration on the top Altcoins: Instead of moving to smaller altcoins, funds largely remained in the top 20 cryptocurrencies by market capitalization. Projects with strong fundamentals and diverse use cases gained popularity, but the smaller altcoins gathered minimal attention.

Implications for the Investors

For cryptocurrency investors, the present cycle’s changing trends provide insightful information.

• Adjusting to shifts in the market: Investors need to stay adaptable and constantly update their plans in order to keep up with the changing dynamics of the market.

• Pay Attention to the Basics: It is more crucial than ever to give priority to companies with solid use cases and a track record of success because cryptocurrency speculative growth is constrained.

Factors Influencing Crypto Market Cycles

Different factors shape the crypto market cycles. They are as follows.

• Investor Sentiment: Changes in investor sentiment, driven by positive and negative reviews or adoption stories, can rapidly change the market dynamics and also affect the prices of cryptocurrencies.

• Market Adoption: As consumers and businesses continuously use cryptocurrencies, their value and credibility keep growing. This can potentially boost market cycles, while slower adoption can stagnate the prices of crypto assets.

• Regulatory Changes: Announcements regarding government stances or crypto regulations can validate their legitimacy and influence growth. However, this might create uncertainty and contract the market.

• Technological Advancements: Developments in new crypto platforms and blockchain technology significantly influence market cycles by attracting more investors and enhancing utility.

• Macroeconomic factors: Inflation, global economic health, and interest rate changes can indirectly impact the crypto market. Investors sometimes look to cryptocurrencies as a hedge during economic instability.

Navigating the crypto market cycles is possible only when investors start understanding these factors properly. They provide a brief insight into potential market movements and help in making informed decisions.

Conclusion

An investor’s journey through the different phases of the crypto bull market is exciting but also challenging. By identifying the nuances of each phase and coping with emerging trends, investors can maximize their potential gains and eliminate risks. However, the present bull cycle has underscored the importance of adaptability, vigilance, and deep knowledge of market dynamics.

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FAQ

1.What are the different phases of crypto bull market?

The different phases of the crypto bull run includes accumulation, mark up, distribution and mark down.

2.What happens in the crypto bull run cycle?

One of the most common phenomena that happens in the crypto bull run cycle is that the prices of the cryptocurrencies rise rapidly.