Crypto Bears: Influencing Market Direction

Bears are those who believe that prices in a given market will decline over an extended period of time.

Who are Bears?

A bear is a cautious or pessimistic person, and the term Bear Market describes a market that experiences significant downward pressure over a long period of time. In a bear market, traders sell more often than they buy.

Many coins have experienced high-profile bear market periods. The most famous is the 410-day drop in bitcoin seen between 2013 and 2015. A bear market has many potential causes, and they can vary greatly depending on the coin or token.

Leading financial observers and many institutional investors have made extremely categorical bearish predictions about cryptocurrencies. Nevertheless, despite the tremendous growth of many digital currencies in recent years, many of them believe that the dynamics of cryptocurrencies are unsustainable.

Often critics argue that blockchain technology has not and never will prove its usefulness in the ‘real world’ and that once this fact is recognized, cryptocurrency prices will collapse. In some cases, especially among dedicated crypto-traders, a bearish outlook can be accompanied by specific events. In bitcoin, for example, bear markets tend to precede halving events, which in turn trigger bull markets – that is, a period of sustained upside. Bear markets should not be confused with price corrections. A price correction refers to a decline in the price of an asset or security by more than 10% from its last peak. A price correction can cause a bear market, or it can be short-lived.

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