Someone who believes that prices in a given market will decline over an extended period. Such a person might be referred to as “bearish.”
While a bear is an individual who is cautious or pessimistic, the related term “bear market” describes a market that is experiencing significant downward pressure over a sustained period of time.
In a bear market, traders are more likely to sell than to buy. Many coins have endured high-profile bear market conditions. The most famous may be the 410-day Bitcoin decline seen between 2013 and 2015. There are many potential reasons why someone might adopt a bearish outlook, and these can vary significantly by
coin or
token.
Mainstream financial commentators and many institutional investors are extremely forthright in their bearish predictions for
cryptocurrencies. Despite the enormous gains seen across many digital currencies over the years, many of these individuals maintain that crypto's momentum is unsustainable.
Critics often argue that
blockchain technology has not and will never prove to have “real world” utility and that crypto prices will collapse when this is recognized.
Elsewhere, particularly among dedicated crypto traders, a bearish outlook might accompany specific events. In Bitcoin, for example, bear markets tend to precede
halving events, which in turn tend to trigger
bull markets — that is a period of sustained upswing. Bear markets should not be confused with
price corrections. This refers to a decline in the price of an
asset or security of more than 10% when compared with its most recent peak. A price correction may trigger a bear market, or it may be short-lived.