What Is Bear Market?

A bear market is a sustained period of falling prices and pessimism, typically defined as a decline of 20% or more from recent highs.

Definition

A bear market is an extended stretch of declining asset prices, commonly defined as a drop of 20% or more from a recent peak.

Bear markets are marked by pessimism, fear, weak demand, and a widespread expectation that prices will continue to fall. They often coincide with economic slowdowns, rising interest rates, or shocks to confidence.

While painful, bear markets are a normal part of market cycles. They can present long-term buying opportunities for patient investors, as quality assets often trade at discounted prices.

Strategies that help during bear markets include dollar-cost averaging, holding cash or stablecoins for flexibility, and resisting the urge to panic-sell at the bottom. Bear markets eventually give way to recovery and new bull runs.

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