In the crypto market, certain terms are used to denote market conditions. One of such terms is the "Crypto Bear Market" – which signifies a decline in market value.
The Crypto bear market is a situation of indecision in the crypto market.
However, bear markets can be helpful to crypto traders and investors in various ways like building their portfolio, backtesting their strategy, and a lot more.
The crypto bear market is here. Let's examine how long it lasts and what you should do about it.
What is a Bear Market?
A Bear Market is an economic condition that experiences a decline in the stock market and generally, a poor economic performance.
A Crypto Bear Market is an extended period where crypto prices are down as a result of declining trends.
Bear markets are usually a period where investors and market makers restrain from investing as they are pessimistic about the market.
It is said that the market is called a "Bear Market" because of how bears attack. A typical bear attacks by slapping down its enemy thus showing a downtrend.
Although, this is a little controversial and also trivial.
A bear market is usually seen as a terrible period but notwithstanding, bear markets can enable anyone that has a better understanding of the market to make a good ROI.
How Long Does A Crypto Bear Market Last?
A bear market does not have a specific timeframe but over the years, there has always been a spike in crypto prices after 3 years or above.
Bitcoin which is a major cryptocurrency experienced an ATH (All-Time High) in December of 2017 hitting about $20k and then saw a downtrend the following year.
Bitcoin did not reach its ATH till 2020 and a lot of people believe that the period when Bitcoin was experiencing a downtrend was the Bear market.
Mind you, the bear market never lasted up to 3 years. The coin (Bitcoin) didn't reach its ATH but bottomed out which ended the bear market. After a coin bottoms out, the bull market is about to start and a lot of people do not know this.
In a bear market, you don't wait for a coin to reach its ATH or close to it before you buy because the market may already be in a bull trend.
What To Do In A Bear Market
A bear market makes a lot of crypto millionaires as the market experiences major trends.
One can never know when a coin will bottom out, likewise, when it would reach its ATH, and would be clueless about when to buy, especially new traders.
A safe way to invest during a bear market is using DCA (Dollar Cost Averaging). Dollar Cost Averaging in simple terms is; buying a certain amount of a crypto asset you want to hold for the long run.
In DCA, no matter the market conditions, whether up or down, your goal is to always buy a certain amount continuously, according to your plan.
However, the fund should be what you can afford to lose, and it should be targeted in the far future.
Though this is called investment and you may think on a large scale, maybe thousands but you can always use any amount you are comfortable with losing.
Is The Bear Market Ending Soon?
Since the crypto market is unpredictable, it is almost impossible for anyone to say when the market will bottom out and start experiencing an upward trend but Bitcoin, as of now, is experiencing a little upward trend, experts still say that Bitcoin will dip further.
The best time to buy is now, with a DCA strategy and a long-term goal – as Bitcoin is expected to reach an ATH of $100k and above according to expert analysts.
The bear market is a blessing to all crypto investors as there are a lot of potential opportunities it presents. A bear market should be a period of preparation for the bull run as bull markets mostly come with new technologies and opportunities. Note that this is not financial advice but solely for educational and entertainment purposes.