What is a bear market?

What is a ‘bear market’? 

BEAR MARKET (two-word syntagma) is a negative situation on the market when asset price falls 20% or more from the recent high, usually followed by the ‘panic sell’.

Used in a sentence: ‘’During bear markets, investors and traders typically feel a sense of panic due to the big downturn and look to sell their assets.”

Facts to remember:

• A bear market is usually followed by the ‘panic sell’ of an asset
• A bear market can be secular or cyclical 
• The opposite situation is called the ‘bull market’

The naming of Bear Market originates from the way a bear attacks its prey – placing the paws downwards. In the cryptocurrency niche, bear markets tend to be cyclical and they take turns with bull market situations. Any major external intervention or negative event can cause a bear market – i.e. government decisions that have an impact on global trade, fraudulent actions, and market manipulations, hacks, etc.

Bear markets can create confusion since there is no way of telling how long they will last with certainty. However, there are ways to increase the value of your assets even when the market is going down. Short selling, swing trading, and coin staking are the most popular ways of staying profitable during a bear market. 

It’s not easy to keep calm during a bear market, but keep in mind that market cycles are a normal occurrence and will pass. Understanding key trends and indicators is always helpful, along with avoiding irrational decisions or taking risks before conducting your own research. 

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Disclaimer: The information provided in this post is not legal, accounting, or financial advice. I am not a lawyer, accountant, or financial advisor. I am not registered as an investment adviser with any federal or state regulatory agency. The Information should not be construed as investment or trading advice and is not meant to be a solicitation or recommendation to buy, sell, or hold any cryptocurrencies.