Bear Market
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In Brief
bear market is a prolonged period of falling prices and negative sentiment, typically defined as a decline of 20% or more from recent highs, where investors expect prices to keep dropping.
What Is a Bear Market?
A bear market is an extended period during which prices fall significantly and investor sentiment turns negative. In crypto, it's commonly defined as a drop of 20% or more from recent highs, accompanied by widespread pessimism and lower trading activity.
The term is often said to come from the way a bear attacks — swiping its paws downward — symbolizing falling prices. Bear markets are a normal part of market cycles, alternating with bull markets over time.
Characteristics of a Bear Market
| Sign | What It Looks Like |
|---|---|
| Falling prices | Sustained decline from recent highs |
| Negative sentiment | Fear, pessimism, and caution dominate |
| Lower volume | Reduced trading and investor activity |
| Capitulation | Many sell at a loss, exhausted by losses |
| "Crypto winter" | Prolonged downturns are nicknamed this in crypto |
What Causes a Bear Market?
Macroeconomic factors — rising interest rates, inflation, or recession fears.
Negative news — regulation, hacks, or major project failures.
Profit-taking — investors selling after a large run-up.
Loss of confidence — fear spreading across the market.
Bear Market vs Bull Market
| Feature | Bear Market | Bull Market |
|---|---|---|
| Price trend | Falling | Rising |
| Sentiment | Pessimistic | Optimistic |
| Investor behavior | Selling, caution | Buying, confidence |
| Typical threshold | Down 20%+ from highs | Up 20%+ from lows |
How Do Investors Approach a Bear Market?
Strategies vary, but common approaches include dollar-cost averaging (buying fixed amounts over time), focusing on long-term fundamentals, holding through the downturn (HODLing), and managing risk carefully. Bear markets can also create lower entry points for long-term investors, though prices can always fall further.
Bear Markets and Trust Wallet
Through bear markets and bull markets alike, Trust Wallet keeps your crypto in your control. As a non-custodial wallet, your assets stay secured by your private keys across 100+ blockchains — not held by an exchange that could face stress in a downturn. You can track prices in real time, set limit orders to buy at target prices, and manage your portfolio on your own terms.