Course Content
What Is a Bear Market?
Financial markets move in trends. It’s important to understand the differences between these trends to be able to make better investment decisions. How come? Well, different market trends can lead to wildly different market conditions. If you don’t know what the underlying trend is, how are you going to adapt to changing conditions? A market trend is the overall direction that the market is going. In a bear market, prices are generally declining. Bear markets can be a challenging time to trade or invest in, especially for beginners. Most crypto traders and technical analysts agree that Bitcoin has been in a macro bull trend throughout its existence. Even so, there have been several relentless cryptocurrency bear markets. These generally bring more than an 80% decline in the price of Bitcoin, while altcoins can easily experience more than 90% declines. What can you do during these times? In this article, we’ll discuss what a bear market is, how you should prepare for it, and how you may be able to profit in it. If you’d like to read about bull markets first, check out What Is A Bull Market?.
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What Is a Bear Market?
About Lesson
We’ve discussed what a bear market is, how traders may protect themselves and profit off bear markets. In summary, the most straightforward strategy is to stay in cash in a bear market – and wait for a safer opportunity to trade. Alternatively, many traders will look for opportunities to build short positions. As we know, it’s wise to follow the direction of the market trend when it comes to trading.