A bear market is a prolonged period of declining prices and negative investor sentiment. In bear markets, asset prices fall significantly (typically 20% or more from recent highs) and remain depressed for an extended time. Fear, pessimism, and reduced trading volumes characterize these periods as investors sell holdings or move to safer assets.

Crypto bear markets are often triggered by regulatory crackdowns, major exchange failures, macroeconomic recessions, or loss of confidence in the ecosystem. However, many long-term investors view bear markets as buying opportunities.

Key Characteristics of Bear Market

  • Falling Prices: Sustained downward trend across most cryptocurrencies
  • Negative Sentiment: Fear, uncertainty, doubt (FUD), media criticism
  • Low Volume: Decreased trading activity as investors exit or sit on sidelines
  • Long Duration: Can last months or years (2018-2020, 2022-2023)
  • Capitulation: Final stage where most remaining holders sell in despair

Real-World Example

After Bitcoin's peak of $69,000 in November 2021, it entered a bear market, falling to $15,500 by November 2022—a 78% decline. Many altcoins fell 80-95% during this period.

Understanding Bear Market is easier when you're familiar with these related concepts:

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