Bear Market

When prices of assets in a market fall by 20% or more from recent highs, it is often called a bear market. This happens when investor confidence is low and the economy and market turn pessimistic.

What is a bear market?

A bear market is a market in which prices have fallen by 20% from their peak value. They are usually caused by an economic recession or some other event that has a significant impact on the economy.

Why Is It Called a Bear Market?

A bear market got its name from an old saying about not selling a bear’s skin before catching the bear. Some people believe that it is named after the way a bear attacks its prey by swiping its paws downward.

How Long Do they usually Last?

How long does a bear market usually last? A bear market usually lasts around 362 days, or just over a year. They happen every five or six years on average.

A bear market is a normal occurrence that happens in the economy. This means that stock values decrease, but eventually they will recover. If stock values continue to go down, this could lead to a recession. A recession is when the economy stops growing for an extended period of time.

Bear Market Examples

The 1929 Great Depression

The most well-known and severe economic downturns are called bear markets. The Great Depression, which started in 1929, was one of the longest and worst bear markets in history. The global economy didn’t start to revive until the late 1930s. Some people argue that the 1929 US stock market crisis was the spark that caused the Great Depression, while others argue that it was more of a consequence than a cause.

The Wall Street Crash of 1929 was a sudden and unexpected decrease in stock values on the New York Stock Exchange. This was soon followed by the London Stock Exchange Crash, both of which signified the beginning of the Great Depression, which was then followed by the “Roaring Twenties,” a period characterized by luxury following World War I.

The fall in the stock market was caused by too much anticipation that it would continue to rise as more and more people got involved.

The 2008 Financial Crisis

The global financial crisis of 2007-2008 was a severe recession that was caused by the housing crisis and risky financial practices by banks. The recession came to a head in September 2008 when Lehman Brothers filed for bankruptcy, causing a global banking crisis.

The 2007-2009 Financial Crisis was a very bad time for the economy. This was especially true for the stock market, which went through a huge bear market. The crisis started with the housing crisis, and it got worse when banks started taking on too much risk. The recession came to a head in September 2008 when Lehman Brothers went bankrupt. This caused a global banking crisis.

The S&P 500 lost a lot of its value as a result of these events, but the market began to rise again in 2009 and entered a bull market that lasted until February 2020.

Bear Market in Cryptocurrency

Cryptocurrencies have seen a bear market recently. Bitcoin, in particular, went from around $20,000 per coin to just over $3,200 in a few days. It then rose in price again, reaching approximately $65,000 per coin in April 2021 before plummeting to below $32,000 in May.