Yesterday, we went over the definition of a bull market, but today, we’ll talk about a “bear market.”
A crypto bear market is the opposite of a bull market—i.e., a protracted period when prices decrease and stay low.
There’s an old adage on Wall Street among investors and traders that describes markets succinctly: “Markets take the stairs up and the elevator down.” In a bear market, prices crash—and they crash hard and fast. When this happens, though, you see which crypto projects have a strong foundation and which ones don’t.
Unfortunately, predicting when a bear market will strike next is impossible since many factors are at play, such as new stringent regulations, lower adoption numbers, negative news, and black swan events.
Sometimes, bear markets are necessary for investors to snap out of their bull market euphoria and come back down to earth to separate the wheat from the chaff in their crypto portfolios.
Part of what makes a bear market is the urge to sell investments; however, if you have confidence in projects you’ve invested in, more often than not, hodling until the market returns to a bull market is the better strategy.
Meanwhile, bear markets aren’t always doom and gloom. Yes, prices tank, but this simply means that prices are now at a discount. So, if you’ve got a keen eye for projects that could see large gains when the market turns around, you could be in a prime position to see your portfolio appreciate exponentially.
