Bear market

A bear market is a prolonged period of falling prices and pessimism. In stocks, a decline of 20% or more from a recent high is a common threshold. In crypto, bear markets have been much deeper. Bitcoin fell roughly 84% from its December 2017 peak to its December 2018 low and about 77% from its November 2021 high to its November 2022 low, and many altcoins fell more than 90%.

Bear markets expose weak projects and over-leveraged firms. The 2022 downturn included the collapse of TerraUSD, the lender Celsius and the exchange FTX. Trading volumes and interest drop, and many tokens never recover.

Some long-term investors keep buying gradually through bear markets. That only makes sense with money you will not need for years and in assets you have good reason to expect to survive.