A bearish market, often referred to as a bear market, is characterized by declining prices and widespread pessimism. Here are some key indicators to identify a bearish market:
1. đPrice Trends : Consistent downward movement in asset prices over a prolonged period (usually 20% or more from recent highs).
2.đ Trading Volume : Increased trading volume during price declines, indicating panic selling.
3. đMarket Sentiment : Pessimistic news and investor sentiment dominate. This can be gauged through sentiment analysis tools and market news.
4. đEconomic Indicators : Economic downturns, such as rising unemployment, declining GDP, and lower consumer spending, often accompany bear markets.
5. đTechnical Analysis :
- âŠïžMoving Averages : Prices consistently below long-term moving averages (e.g., 200-day moving average).
- âŠïžTrend Lines : Clear downward trend lines in price charts.
- âŠïžRelative Strength Index (RSI) : RSI below 30, indicating an oversold condition.
6.đ Fundamental Analysis : Declining earnings, reduced revenue forecasts, and poor financial health of companies can signal a bear market.
