What is a Bear Market, How to Understand It?
The bear market is among the topics that all crypto money investors, especially those interested in technical analysis, should know due to its importance.
The crypto money market, which continues to be on the agenda by increasing its speed with each passing day, is gaining new investors in parallel. Although it may seem like a crypto-terminology dictionary is needed for beginners due to the confusion of terms, in fact, after some information is acquired, all the remaining information can be learned more easily and quickly.
In this article, the basic information about the Bear Market that every crypto money investor should know is given. The main purpose of the article is to convey basic information about Bear Market, which is the term that will be heard most in crypto markets.
What is a Bear Market?
Bear Market, with its most basic definition, can be described as “prices in a downward trend”.
Bearish Market, which has been translated into our language from the English Bearish Market term, offers predictions about many markets, especially the crypto money market. It is generally an indicator of the decrease in the prices of financial products and the demand for financial products.
In order to talk about the existence of the bear market, which is frequently encountered in times of economic depression, it is necessary to see a decrease in the main trends.
A bear market is a market where the selling force dominates the buying power and causes a minimum 20% decrease in prices. This situation results in panic and indecision due to falls.
The resulting panic and indecision then give way to stagnation and then to a decline in product demand. Decreases in product demand lower the market value of the financial product (due to less demand).
As can be understood, the impact of the bear market on financial products is negative.
How Long Does a Bear Market Last?
It is unpredictable how long the bear market will last. We can make predictions about when it will start and when it will end, but it is impossible to specify an exact date. A bear market period can last for days, weeks, months or even years.
The market value of the financial product may drop to the lowest point, as the financial product is given a downward momentum in the bear market and because the financial product is not preferred by anyone because of the downward action.
If the bear market disappears within days or a few weeks, the value of the product may increase or remain stable in a short time. Since the product is in demand again, it is likely to rise by breaking the negative impact of the bear market due to the increase in demand.
Where Did the Bear Market Get Its Name?
One of the most natural questions that may come to mind about the bear market is where the name bear market comes from. Many people who have researched the concept of a bear market and learned what it is will ask, “Why Bear?” can ask.
The reason why the bear market is symbolized by “bear”; This is due to the fact that bears do not attack their enemies by lowering their claws from top to bottom in case of attack. This is where the name of the bear market, which shows downward action like bears in attack, comes from.
Past Bear Markets and Their Effects
As of 1926, 8 bear markets were seen in total. Some were short-lived, while others had devastating effects.
It is also possible to encounter a bear market that lasts for 3 months and a bear market that lasts for years. Investors have a hard time making decisions as investors are confused by the drop in prices, and this suddenly causes the bear season to begin. How long the bear season will last also depends on the behavior and actions of the investors in the general ratio.
An investor who falls into pessimism does not want to make wrong investments and therefore stabilizes the market by acting jointly with other investors who think like him. As the market stagnates, purchases are not made, and the price of the financial product declines. The successive occurrence of events that support each other contributes to the destructive effect of the bear market.
There are some patterns that show the bear market and these patterns provide very useful information in technical analysis. Of course, each of these formations needs to be examined and learned specifically, but if we need to talk about these formations and in which formation category they are in, we can list them under the headings as follows.
Highly Reliable Formations
- Dark Cloud
- Abandoned Baby
- Evening Star
- Doji Evening Star
- Knocked Candles
- Three Black Crows
- Triple Inside Down
- Triple Outer Down
- Two Crows Breaking Up
Moderate Confidence Formations
- Long Doji
- Dragonfly Doji
- Swallowing Bear
- Gravestone Doji
- Doji Star
- Cross Country Pregnant
- Value Candles
- Rising Block
- Don’t Stop and Think
- Three Stars
- Two Crows
- Breakaway Bear
- In Collar
- Neck Collar
- Three Pregnant Women Closing the Gap
- Tasuki That Couldn’t Close the Gap
- Side by Side White Candles
Low Confidence Formations
- Falling Star
- Waist Hold
- Hanging Man
- Pregnant Bear
- Separated Candles
- Pushing Bear
- Bear Washing Three Sticks
Formations Indicating Continuing the Decline
- Three Pregnant Fallen
- Long Black Candle
- Black Marubozu
- Black Closing Marubozu
- Black Combo Marubozu
By taking a detailed and reliable technical analysis training and using these formations with the tools offered by platforms such as TradingView, you can make both bull and bear market forecasts and future price predictions of cryptocurrencies.