A bear market is a financial condition in which the prices of assets, typically Stocks or Cryptocurrencies, decline by 20% or more from recent highs. It is driven by widespread pessimism, economic downturns, or negative market sentiment. During a bear market, investor confidence drops, leading to lower trading volumes and risk-averse behaviour. Long-term investors often hold or rebalance portfolios, while short sellers and hedgers may profit from falling prices. Bear markets can last for months or even years, and recognising them early is essential for strategic planning, capital preservation, and identifying eventual buying opportunities.
Example:
Major Stock indices decline more than 20% over several months, weeks, days reflecting widespread pessimism and sustained downward momentum.
