Bear market

A bear market describes a sustained downturn, not just a bad day or a bad week. Traders commonly use a rule of thumb borrowed from traditional finance: prices need to fall at least 20% from a recent high and stay depressed for an extended stretch before the label applies. In crypto, where daily swings of 10% or more are unremarkable, that threshold is often treated loosely, and analysts look instead at longer-term signals such as price staying below its 200-day or 365-day moving average.

Crypto bear markets tend to be deeper and longer than their stock-market counterparts. Bitcoin has fallen 77% to over 90% from its previous peak in each of its major downturns since 2011, and full cycles from top to bottom have historically run 9 to 18 months. The 2022 bear market is a well-documented example: Bitcoin dropped from roughly $69,000 to under $16,000 after the collapse of Terra/LUNA and the bankruptcy of FTX, compounded by aggressive interest-rate hikes that pulled liquidity out of risk assets generally.

Bear markets are usually marked by falling trading volumes, negative media coverage, and periods of panic selling known as capitulation, where investors abandon positions near a bottom. Not every asset moves in lockstep: altcoins often start declining before Bitcoin and recover later. Long-term holders sometimes use extended downturns to accumulate at lower prices, though timing a true bottom in advance is notoriously unreliable. Historically, every crypto bear market has eventually given way to a new bull cycle.