What is a bear market?

A bear market is a phase of the financial market in which asset prices experience a prolonged decline. It is generally characterized by a drop of 20% or more from recent highs.

Signs of a bear market:

🔵 Long-term decline in asset prices (stocks, cryptocurrencies, etc.).
🔵 Investor pessimism and massive sell-offs.
🔵 Decrease in economic activity and GDP.
🔵 High volatility and sharp price drops.

Causes of a bear market:

🔵 Economic crisis or recession.
🔵 Interest rate increases by central banks.
🔵 Financial scandals or bankruptcies of major companies.
🔵 Geopolitical instability.

How do investors react in a bear market?

🔵 Conservative strategy – buying low-volatility assets (gold, bonds).
🔵 Short selling – profiting from falling prices (selling before buying back at a lower price).
🔵 Long-term investing – buying promising assets at low prices while waiting for them to grow.

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