What is a Bear Market And How Does It Affect Crypto?
After going through a bear market for more than a year, during that last few days of 2017 and in 2018, you most likely know how this one affects cryptocurrencies. Nonetheless, here is the detailed definition of the term.
What is a bear market?
A bear market refers to a long-term market downtrend that is paired with widespread pessimism and generally negative market sentiment.
When does a bear market occur?
Negative market conditions tend to occur in financial markets after a long bull market since the market tends to work in long-term cycles.
Take the latest Bitcoin “bear market” for example. The most popular cryptocurrency saw explosive growth in 2017, reaching a high of almost $20.000 during its peak.
Shortly after reaching its all-time high, however, the price started decreasing for a period that lasted longer than a year. This long term downtrend is what cryptocurrency investors refer to as a “bear market”.
It may be good to keep the following in mind. Bear markets can actually be a positive and healthy occurrence in the cryptocurrency space. As such, they should be taken advantage of.
Knowing that one is in a bear market can be a great opportunity to sell his coins and rebuy at a later time at a lower price.