What Is a Bear?
A bear is an individual who is cautious or pessimistic. However, the term “bear market” refers to a market that is experiencing significant downward pressure over a sustained period of time.
During a bear market, traders are more inclined to sell rather than buy. Many coins have faced high-profile bear market conditions. One of the most well-known examples is the 410-day decline of Bitcoin between 2013 and 2015. There are various reasons why someone might adopt a bearish outlook, and these reasons can differ depending on the coin or token.
Mainstream financial commentators and many institutional investors are very open about their bearish predictions for cryptocurrencies. Despite the significant gains seen in many digital currencies over the years, these individuals believe that crypto’s momentum is not sustainable.
Critics often argue that blockchain technology has not and will never prove to have “real world” utility, and they believe that crypto prices will collapse once this is recognized.
Among dedicated crypto traders, a bearish outlook might accompany specific events. In the case of Bitcoin, bear markets often precede halving events, which in turn tend to trigger bull markets – a period of sustained upswings. It is important to note that bear markets should not be confused with price corrections. Price corrections refer to a decline in the price of an asset or security of more than 10% compared to its most recent peak. A price correction may trigger a bear market, or it may be short-lived.
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