Term: Bull Market

A bull market is a sustained period during which prices in a market — a stock, an index, a commodity, or even a broad asset class like crypto — are generally rising. The term describes a trend that plays out over months or years, not a single good day or week of gains.

The name comes from the way a bull attacks, thrusting its horns upward, which traders use as a mental image for rising prices; the opposite is a "bear market," named for a bear swiping downward. In a bull market, buyers ("bulls") are more aggressive and more numerous than sellers at the margin, so each dip tends to attract new buying before the price falls too far, and each rally tends to push to new highs. This creates a pattern of higher highs and higher lows on a chart.

The nuance that trips people up is that a bull market does not mean prices only go up. Sharp short-term drops, sometimes 10% or more, can and do happen inside a bull market — these are usually called corrections or pullbacks. What defines the bull market is the overall direction over the longer stretch of time, not the absence of down days. Traders and analysts often use a rough threshold — a price rise of a certain percentage from a recent low — to formally label something a bull market, but reasonable people can disagree about exactly when one starts or ends until well after the fact.

It's also worth separating the term from sentiment. "Bullish" describes an opinion or bias that a trader holds about a specific asset going forward, while "bull market" describes an observed, ongoing condition of the broader market or a specific instrument over time. You can be bullish during a bear market, or bearish during a bull market, on any given trade.