A crypto bear market has the same bearish features, pertaining to cryptocurrency. During a crypto bear market, the prices of Bitcoin (BTC) and altcoins decline significantly from their recent highs and continue trending downward. You may also notice less media coverage or more negative crypto-related headlines during a bear market.
While a crypto bear market shares all the traits of a stock bear market, crypto tends to be more volatile and prices may fall further. Although the crypto market cap surpassed $1 trillion in the early 2020s, it's still at a nascent stage compared with U.S. equities or precious metals.
It takes less money to move crypto up or down, which results in more severe losses during a bear market. Since crypto attracts many speculative investors, it's more likely to fall harder than the stock market.
Many crypto-specific metrics can help investors determine whether they're in a bear market. Since transaction data is viewable on the blockchain, many firms research on-chain data. For instance, analysts can monitor the hash rate of the Bitcoin network, which lets them know how many BTC miners are keeping Bitcoin secure. Generally, the lower the hash rate, the higher probability of a Bitcoin bear market.
Blockchain experts often look into how many tokens flow back to centralized exchanges, which can signal intense sell pressure. Analysts can review network.
congestion and average daily transactions to see how many people are using various blockchains.
Bull market vs. bear market
Unlike bears, bulls tend to attack toreadors by thrusting their horns upward. Therefore, a bull market means asset prices are increasing.
Not only are prices moving up during a bull market, but there's also a more optimistic vibe in the investor community. People feel comfortable taking on risks and investing in stocks or crypto. You'll also notice an uptick in trading volume and positive economic data, such as a high GDP, strong consumer sentiment, and low unemployment.
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