Cryptocurrency Bull and Bear Markets: Why Long-Term Investors Choose to Keep Going Long?

In the cryptocurrency market, going long and going short are two fundamental trading strategies. Many novice traders wonder: since both upward and downward movements are possible, why not go long during an uptrend and short during a downtrend? The answer is not as simple as it seems. By analyzing market data and trading models in depth, we find that there is an absolute asymmetrical advantage between going long and going short.

Market Up and Down Are Equal, But Returns Differ Significantly

Historical data shows that over the past eight years of Bitcoin trading, the distribution of up days and down days is nearly even. During this period, about 54% of trading days closed higher, and 46% closed lower. From a profit perspective, going long and going short are theoretically similar.

But there is a shocking truth hidden here: despite nearly equal numbers of up and down moves, Bitcoin’s price has risen from early $134 to tens of thousands of dollars today, with a total increase of over 350 times. What does this indicate? It shows that gains far outweigh losses. When short sellers profit, they often earn only small profits from each decline, but when long investors lose, they face huge drops.

In other words, going long can make big money, while going short can lead to big losses. This profit-loss imbalance is the core difference between going long and going short.

The Profit Ceiling of Shorting and Infinite Possibilities of Going Long

Understanding the profit model is crucial for choosing a trading strategy. The profit structures of going long and going short are completely different.

For example, with a $100 principal:

• Long scenario: Buy spot with $100, price rises from $1 to $50, final profit is $5,000, a 50-fold increase
• Short scenario: Short with $100 (1x leverage), price drops from $50 to $1, final profit is $198, less than double

This comparison makes the gap immediately clear. Profits from going long increase infinitely as prices rise, while profits from shorting have an absolute cap. Even with leverage, the profit structure of shorting does not change — this is the essence of the profit contraction model.

Long positions are an inflationary profit model: the higher the price goes, the larger the profit. Short positions are a deflationary profit model: even as prices fall, profit growth slows and eventually approaches a limit. Under the same leverage, profits from going long are always greater than from shorting.

The Long-Term Uptrend of the Crypto Market: Riding the Trend Is the Way

The crypto market is still in its early development stage. Although mainstream coins like Bitcoin and Ethereum are highly volatile, their global acceptance continues to grow. From the overall market trend, this is a long-term upward trajectory.

In such an environment, going long aligns with the overall trend. What about shorting? Even if short-term profits can be made from declines, they are only short-term counter-moves in an overall upward trend. It’s like picking up coins in front of a bulldozer or striking matches in a gunpowder depot — occasional gains are possible, but the risks are huge.

Trend followers prosper, contrarians perish. In a long-term rapidly growing market, going long means riding the trend, while shorting involves risking huge losses for tiny profits. Even if shorting sometimes yields short-term gains, it doesn’t change the fact that, from a big cycle perspective, it’s going against the trend.

Switching Between Bull and Bear Markets Doesn’t Make Shorting the Best Choice

Some investors might think: “In a bull market, go long; in a bear market, go short — that’s perfect!” This idea seems reasonable but ignores a key fact.

Shorting profits are inferior to going long; shorting follows a profit contraction model, and it involves betting against the big trend — these points do not change just because the market enters a bear phase. Shorting is essentially a poison: whether you drink it all the time or only during bear markets, it remains poison.

Moreover, accurately predicting the turning points of bull and bear markets is nearly impossible. Most retail investors don’t wait patiently during bear markets; they panic and sell at a loss, or get caught short at high prices. This is not a trading strategy issue, but a human nature problem.

Practical Strategy: Adjust Positions Based on Certainty

So what should ordinary investors do? The most reasonable approach is not to go all-in during extreme conditions but to adjust position sizes flexibly based on the certainty of the market.

Core principles:

• High certainty of bullishness (7-10% position): When strongly optimistic about the market at key levels, focus on major coins like Bitcoin and Ethereum
• High certainty of bearishness (3% position): When the market clearly peaks and starts to fall, keep a light position, holding small amounts of Bitcoin and Ethereum for defense
• Uncertain bullish or bearish signals (50% position): When market direction is unclear, hold a moderate position, including Bitcoin and Ethereum

This approach’s advantage is: during rallies, you profit; during declines, you can still “earn coins.” When prices fall, you can use USDT to buy low, gradually accumulating more coins. When the next bull market arrives, your holdings will have grown significantly, multiplying your gains.

Additionally, since the main holdings are large-cap coins like Bitcoin and Ethereum, it’s less likely to get deeply trapped. Even if entry points aren’t perfect, subsequent rallies can compensate.

The Logic Behind Going Long vs. Short

Understanding why going long is superior hinges on recognizing the fundamental characteristics of the crypto market: it’s a long-term growth market, which gives long positions a strategic advantage. Going long is not just a trading tactic but a way to align with the market’s overall direction.

While shorting can generate profits in certain phases, in the long run, it always involves fighting against the main trend. Even with strong technical analysis, it’s difficult to oppose the market’s long-term upward trend. Choosing to go long means standing on the side of most growth — that’s the correct stance in the crypto market.