Bear Market

A bear market is a prolonged period of falling prices and pessimistic sentiment. In crypto the term usually describes a sustained, broad decline rather than a brief dip.

How it works

Bear markets are driven by some mix of tighter financial conditions, fading speculation, negative news and the unwinding of earlier excess. They tend to feed on themselves: falling prices erode confidence, which prompts more selling. The opposite condition, a sustained rise in optimism and prices, is called a bull market.

Why it matters

Recognising the broader market mood helps set expectations: in a bear market, rallies are often short-lived and risk is elevated. These phases also tend to clear out weaker projects and reward patience, which is why long-term holders pay attention to where the cycle stands.

Example

A year in which most major coins lose a large share of their value and trading interest dries up would be described as a bear market.