Bear Market
In short: A bear market is a prolonged market downtrend in which prices fall broadly for months and pessimism dominates.
A bear market is a prolonged market downtrend in which prices fall broadly for months and pessimism dominates. In traditional finance, a drop of 20% or more from a previous peak is a common rule of thumb, and the name is often linked to the way a bear swipes its paws downward.
Why it matters
Bear markets change how the whole market behaves. Trading volume and liquidity usually shrink, order books thin out and spreads can widen, while leveraged positions face liquidations and projects that depended on rising prices may cut back or close. Sharp rebounds, sometimes called bear-market rallies, can look like a new uptrend and then fade. Recognizing the phase helps users set realistic expectations and think about risk instead of reacting to every headline.
Example
After a long rally, months of selling push most major coins well below their previous highs. News coverage turns negative, new sign-ups slow, and each recovery attempt stalls at a lower level than the one before. Crypto bear markets can be far deeper than the 20% threshold used in stock markets, and a pattern of lower highs and lower lows lasting many months is typical of the phase.