Bear Market Definition

A bear market is a long stretch when prices keep moving down and confidence is low. You will see the term used for crypto, stocks, and other markets to signal a broad, persistent drop rather than a quick dip. In basic terms, demand dries up, sellers dominate, and prices trend lower. 

How it is identified

There is no single official trigger, but two common yardsticks show up often. Many analysts look for a clear, ongoing downtrend across a market. Others point to a drop of about 20 percent from recent highs, sometimes within a specific window such as 60 days. The shared theme is sustained weakness and negative sentiment rather than a brief correction. 

Why crypto bear markets hit harder

Compared with traditional markets, crypto markets are smaller and more volatile, so declines can be steeper and last longer. In big crypto bear phases, falls of 85 percent from previous peaks are not unusual. 

What characterizes the environment

Bear markets tend to show the same set of features: prices falling over an extended period, fear and low confidence in public chatter, and a consistent imbalance where supply exceeds demand. 

Sentiment and investor behavior

Pessimism feeds on itself. As prices slide, some holders panic sell to avoid more losses, which adds to the selling pressure. Large liquidations or aggressive sell orders can deepen a drop. 

Typical duration and what affects it

A bear phase can last weeks, months, or even years. Macroeconomic forces such as higher inflation and interest rates, plus general economic conditions, can stretch or shorten the cycle. 

Phases often described by analysts

Writers commonly break a crypto bear market into four broad stages: a late-optimism peak, an early slide with bounces, a full-on decline with capitulation, and a late stage where prices base out. The labels differ across sources, but the progression from denial to capitulation to stabilization is a familiar storyline. 

How traders try to spot one

To separate a true bear trend from noise, market watchers pair price action with indicators such as moving averages, MACD, RSI, and On-Balance Volume. These tools aim to confirm momentum and trend strength rather than predict exact turning points.

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