The basic definitions
A bull market is a sustained period of rising prices and general optimism; a bear market is a sustained period of falling prices and pessimism. The animals are a memory aid: a bull thrusts its horns upward, a bear swipes its paws downward.
These terms are used loosely across all markets, from stocks to currencies to crypto. There is no single official threshold, though a common rough rule for stock indices is a 20% decline from a recent peak marking a bear market.
Obvious in hindsight, murky in the moment
It is easy to label a bull or bear market when looking at a completed chart. Living through one is different. Bull markets have frightening dips that look like the start of a crash, and bear markets have sharp rallies that look like recovery. Both fool people constantly.
Because of this, "the trend is your friend" is easier to say than to apply. By the time a trend is undeniable, much of the move may be over, and turning points are only clear afterward. Be wary of anyone who claims to reliably call tops and bottoms.
Why the label matters less than your risk
Knowing whether you are in a bull or bear market does not tell you what happens next. What protects an account is position sizing, stop-losses, and not betting the balance on a single view — regardless of what the broader trend is called.
It is fine to lean with a trend you can see, but never confuse a label with certainty. Markets change character without warning, and a strategy that only works in one regime will eventually meet the other.