A bear market is a sustained decline in a market or defined group of assets. Falling prices are often accompanied by weaker confidence and reduced willingness to take risk, although trading activity and volatility can vary greatly during the decline.
Decline versus a bad day
Traditional market commentary commonly uses a fall of at least 20% from a recent peak as a reference. In crypto, this is a convention rather than a universal rule: a volatile token can lose that much quickly without establishing the condition of the whole market. Duration, market breadth and the chosen time frame matter.
How selling pressure develops
Disappointing developments, reduced access to funding or changes in demand can encourage selling. Leveraged positions may be liquidated as collateral values fall, adding further pressure. None of these mechanisms is required for every bear market, and the cause should not be inferred from the price chart alone.
Rallies do not prove recovery
A bear market can contain strong rebounds and long sideways stretches. A token rising for a week after months of losses may still be in a broader downtrend. The label does not reveal the bottom, establish that an asset is undervalued or ensure that it will recover its former price.