As an investor and crypto trader, ever wondered how long bear markets usually last and how to survive the current season.
As an experienced cryptocurrency trader who has stayed long in the system and experienced a lot of cryptocurrency bear seasons and many bull runs. The period of a bear market is the time of acquiring assets and storing for the bull run.
Table of Contents
10 Things You Should Know About Cryptocurrency Bear Markets
Here are 10 things you should know and do in this crypto Bear season to maximize large wealth when the Bull market comes.
1. Always Watch for a 20% Cycle
Market cycles are measured from peak to trough, the stock index officially reaches bear territory when the closing price drops at least 20% from its most recent high,(whereas a correction is a drop of 10%-19.9%). A new bull market begins when the closing price gains 20% from its low.
2. The Stocks lose 36%
On average in a bear market. By contrast, stocks gain 114% on average during a bull market.
3. Crypto Bear market is normal
There have been 26 bear markets in the S&P 500 since 1928. However, there have also been 27 bull markets and stocks have risen significantly over the long term.
4. Bear markets tend to be short-lived
The average length of a bear market is 289 days or about 9.6 months. That’s significantly shorter than the average length of a bull market which is 991 days or 2.7 years.
5. That’s the long-term average frequency between bear markets.
Though many consider the bull market that ended in 2020 to be the longest on record, the bull that ran from December 1987 until the dot-com crash in March 2000 is technically the longest, a drop of 19.9% in 1990 nearly derailed the bull but just missed the bear threshold.
6. Bear markets have been less frequent since World War II.
Between 1928 and 1945 there were 12 bear markets or one about every 1.4 years. Since 1945 there have been 14 one about every 5.4 years.
7. Half of the SPX strongest days in the last 20 years occurred during a bear market.
Another 34% of the market’s best days took place in the first two months of a bull market before it was clear a bull market had begun.
8. A bear market doesn’t necessarily indicate an economic recession.
There have been 26 bear markets since 1929, but only 15 recessions during that time. The market often goes hand in hand with a slowing economy, but a declining market doesn’t necessarily mean a recession is looming.
9. Assuming a 50-year investment horizon
You can expect to live through about 14 bear markets, give or take.
Although it can be difficult to watch your portfolio dip with the market, it’s important to keep in mind that downturns have always been a temporary part of the process.
10. Bear markets can be painful
The markets are the positive majority of the time. Of the last 92 years of market history, the markets have comprised only about 20.6 of those years. Put another way, stocks have been the rising 78% of the time.
Should you invest in a bear market?
I know investment should always be in your mind during this current bear season. But before you invest in a bear market, before you make the move always know that If you shift your perspective, focusing on potential gains rather than potential losses, bear markets can be good opportunities to pick up stocks, Bitcoin, and other altcoins at lower prices.
Secondly, invest in knowledge and explore more this current season to help and guide you to make good financial decisions.
Now you understand how the bear market works, and the things you need to do and survive the current season including investment ideas to follow before buying any crypto assets.