The cryptocurrency market stands out due to its incredible volatility. The fact is that crypto assets emission does not depend on government decisions or central banks. Cryptocurrency exchange rates follow the market laws, such as demand and supply, trends, investors’ sentiments, etc., moving up and down and opening many earning opportunities for investors. Cryptocurrency values follow the main two market trends: bearish and bullish. Let’s discuss the bear market trend in this article.
Bear Market: What is It and What Stages Does It Have?
The last time we witnessed this market trend was spring of 2022 when following BTC, all crypto asset prices dropped significantly. A bear market is the name of a period of prolonged decline in asset value. In crypto fiend, this period is also called “crypto winter”, and means the decline in all crypto assets in the market, causing collapse for some crypto projects that are not robust enough to live through such a challenging period. Indeed, many young and not established crypto projects cannot survive during crypto winter and disappear forever. In some sense, a bearish trend helps filter strong projects from weak ones.
Bear trend always starts with a disbalance between demand and supply, when selling assets begins to overweight buying. Investors feel this trend and start to get rid of their holdings, leaving the market and creating a snowball effect.
The bear trend has some stages:
- Preliminary. The preliminary stage begins as soon as the crypto asset reaches its peak. The market participants are still highly optimistic about a fast market recovery when the first pullback takes place.
- Early-stage. The price moves down several times but recovers quickly. Most investors believe the price will reach the previous heights again.
- Full-fledged. Here we observe a significant downtrend with no upward price movements or insignificant increases that never reach the previous peaks. Investors start to sell their holdings massively.
- Late-stage – the downside market movement slows down, and new market bottoms are reached.
Since the latest bear market trend started, many crypto assets have lost value and now look attractive for buying. If you decide to enter the market now Motley Fool crypto news can be helpful, use credible and reliable crypto exchanges such as WhiteBIT, Coinbase, and Binance. These cryptocurrency exchanges offer robust protection for users’ accounts and funds, providing convenient tools for trading and lightning-fast transactions.