Coin Bears: Understanding Bearish Trends in Crypto Markets

Spreading your investments across different crypto assets and traditional investments creates resilience during market downturns. Meme coins, which were once popular among retail investors, have experienced a significant decline. Assets like Dogecoin and Shiba Inu have lost over 70% of their value, reflecting how quickly risk appetite can disappear in uncertain markets. As of late February 2025, Bitcoin had entered bear territory, having declined 28% from coinmama exchange review its January peak of $109,350.

Another prominent theory traces the term back to a 16th-century proverb cautioning against selling a bearskin before catching the bear. For investors, grasping what “coin bears” signify, how to identify them, and how to navigate or even profit from these periods is crucial. In this article, we’ll explore what coin bears are, why they happen, and effective strategies for managing them. Also, the analyst explains that bearish sentiment among investors could indicate a long-term buying opportunity rather than a sell signal. Peterson’s analysis draws parallels between past market downturns and current conditions.

Crypto winters are not the end

The purpose of this website is solely to display information regarding the products and services available on the Crypto.com App. It is not intended to offer access to any of such products and services. You may obtain access to such products and services on the Crypto.com App. Consider what might happen if there was a sudden market crash?

Currently, ETH trades at $2,657, marking a 45% drop from its ATH. Earlier, many market participants confidently predicted that the altcoin would reach between $8,000 and $10,000, but those expectations have yet to be realized. From the look of things, the disbelief stage happened around the first quarter of 2023, when the Bitcoin price began to post gains consistently. Meanwhile, the “Thrill” period probably happened during the ETF approval earlier in January this year, as there were calls for people to double down on buying BTC. If you’re patient, like Buffett, it’s a lot easier to buy when you stand to gain the most. I think that trigger may be as simple as the Fed not cutting rates at all this year,” wrote Peterson.

What does Bull Market mean in Crypto?

Bear markets can be triggered by a range of factors, including adverse regulatory news, macroeconomic downturns, or overextended bull runs that lead to profit-taking and market corrections. In a bear market, the overall value of crypto assets drops significantly, and volatility tends to increase as panic selling takes hold. The crypto bull market is an exciting period marked by rising prices, increased investor confidence, and a positive feedback loop that fuels further growth. During this time, digital asset values surge as new trends emerge and market sentiment turns optimistic. A bear market in crypto refers to a prolonged period of declining prices, typically characterized by a drop of 20% or more from recent highs.

Is a crypto winter the same as a bear market?

Take to heart the cryptocurrency mantra, “Do your own research” (often abbreviated DYOR), and never get involved in a transaction with more money than you can afford to lose. When the chips are down and prices tumble, there’s little room for mistakes. It’s at this time that research becomes more important than ever. One of the best things you can do after getting involved in cryptocurrency is to keep a level head and don’t panic when things start to go south. NFTevening is a renowned and award-nominated media platform dedicated to reporting on the cryptocurrency industry.

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Alternative cryptocurrencies, or altcoins, have suffered the most during this downturn, with the total altcoin market cap falling by 43% since the start of the year. Ethereum, the second-largest cryptocurrency by market capitalization, has been under intense pressure during the current bear market, falling below $2,100 amid broader market turbulence. Mining operations—the backbone of blockchain networks—also feel the pressure. The Bitcoin hash rate (computing power securing the network) declines during bear markets as miners sell their reserves to cover operational costs.

• For example, if you have a $100,000 portfolio, keeping your Bitcoin allocation to a maximum of $5,000 means even a 50% drop won’t devastate your overall holdings.
• Given the hype-driven nature of crypto market cycles, the snowballing of bad news or negative sentiment can set off a cascading effect, rapidly driving prices significantly lower.
• But, putting all your eggs in one basket can be harmful if a bear market occurs.
• Focus on projects with solid fundamentals, strong development teams, and real-world use cases, as these are more likely to survive the winter and thrive when spring returns.
• This indicator assesses the state of the Bitcoin market—bull or Bear—by comparing the Market Cap and Realized Cap of Bitcoin.

What are the Signs of a Bull Market?

For instance, the disbelief marks the end of the bear market when cryptos begin to move into the bull phase. There are also phases of thrill, anxiety, euphoria, or complacency. The event, which surprisingly happened before the halving, sent shockwaves around the market. At that time, many suggested that crypto prices would hit higher highs. The global cryptocurrency market is capitalized at over $3 trillion.

The “Inverse Cramer Effect” suggests that financial markets often move contrary to the recommendations of CNBC’s “Mad Money” host, Jim Cramer. This phenomenon has been observed in various asset classes, including cryptocurrencies. For instance, in November 2024, shortly after Cramer endorsed Bitcoin as a “winner,” the cryptocurrency experienced a significant market capitalization decline of $130 billion. This pattern frequently arises in bear markets when committed investors buy coins at reduced prices while others succumb to panic selling.

It’s when prices keep sliding downhill for months, investor optimism hibernates, and even the most hyped projects struggle to gain traction. While traditional markets might call it quits after a 20% drop, crypto bears often growl louder, sometimes dragging prices down by 70% or more before showing signs of retreat. The broader cryptocurrency market also felt the icy chill of the last crypto winter. In fact, many popular coins saw up to 90–95% price drops (compared to their ATHs). That is why it is paramount for retail and institutional investors to know how to survive crypto bear markets.

• Consult with a tax professional to ensure you’re following the rules in your jurisdiction.
• This pattern is a recurring theme, as a significant crypto bull run has traditionally succeeded each major bear market in recent history.
• Dollar-cost averaging (DCAing) into high-quality coins over time is your friend here.
• Through a basic understanding of the fundamentals of bull and bear markets and as many of the factors that impact crypto as possible, you can better navigate market swings and maximize gains.

By selling the most expensive broker finexo assets first, traders minimize capital gains taxes, preserving more profit and enhancing overall investment returns when market prices eventually decline. The most common solitary question during a period of downturn is, “Should I buy now? Some consider bear markets an opportunity to purchase discounted assets because prices will be short-term lower than their intrinsic value.

In such a scenario, the price could drop to around hycm review $40,000,” Grizzly wrote in his analysis. However, the periods of complacency and anxiety may have been false alarms. According to Glassnode, the Bitcoin Long-Term Holder Sell-side Risk Ratio offers a clue. This metric measures the level of profit-taking compared to past market cycles. These factors, among others, have led some participants to suggest that the market might be heading into a bear phase. To evaluate this possibility, BeInCrypto examines the market cycle psychology chart for insights.

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This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Analyst Burakkesmeci added observations using the 30-day and 365-day moving averages (30DMA and 365DMA) to clarify the bullish potential.

The crypto market turned green in the first week of May, but skepticism remains strong. Some believe current signals show signs of a larger upcoming bullish cycle, especially as Bitcoin breaks a key psychological threshold. The volatile increase (between early November and December 2013) was quickly followed by a steep decline as most market participants sought to book profits in a low-liquidity market. The result was a full-blown crypto winter that lasted for two years with the global market cap dropping from $15 billion to around $3.5 billion at its lowest point in early 2015. Investors undergo contrasting feelings at different stages of bear markets.