CoinucationBear Market
A bear market is a prolonged period of falling prices and negative sentiment, commonly defined as a drop of 20 percent or more from a peak.
A bear market is an extended period of declining prices. In traditional finance it is often defined as a fall of at least 20 percent from recent highs, but in crypto that threshold is crossed so frequently that the term is reserved for deeper, longer declines. Bitcoin fell roughly 75 to 85 percent from peak to trough in the bear markets that began in 2014, 2018, and 2022.
Bear markets are when overextended projects fail. Lending platforms, exchanges, and tokens that depended on rising prices or constant new inflows run out of money. The 2022 bear market saw the collapse of Terra, Celsius, Three Arrows Capital, and FTX within a span of months. Trading volume and public interest decline sharply.
Many long-term participants view bear markets as the period when real development happens, since attention shifts from price to building. Historically the lowest prices have come 12 to 18 months after the previous peak, though there is no guarantee past patterns will repeat.