Bear Market

A bear market is simply a prolonged period in which there are more sellers than buyers. As far as sentiment is concerned, bear markets are characterised by negative market sentiment and pessimism.

Traditionally, bear markets are defined as 20% or more drop in an asset’s value that takes place over several months. However, this 20% figure shouldn’t be viewed as set in stone. Particularly when you take newer, more volatile asset classes into account such as the cryptocurrency market.

Cryptocurrencies can rise and fall by 20% in a single day while still maintaining their prevailing trend.

Bear markets in the crypto space have been few and far between due to how young the asset class is, but looking at previous downturns, it’s not out of the ordinary for crypto assets to drop by 80% to 95% in value.