The 4 Stages of A Bear Market

On November 9, 2021 Bitcoin reached $68.3k - yet a new All Time High — as the Fear and Greed Index reached Extreme Greed.

This also marked the beginning of the Bear Market. In this article we will be looking at the different stages of a bear market.

What makes a Bear Market difficult to spot, as the trend begins to shift, is that there is no indication that it’s at this stage when the wave finally breaks. Maybe it’s just another dip. Bitcoin had rallied earlier during the 2021 summer, corrected and then rallied again.

Denial

(November 2021 — March 2022)

It wasn’t until around February 2022 that people started calling a Bear market in, but even then many were still hopeful that this wasn’t the case. In fact, the Fear and Greed index has bounced back to 60 as late as March 2022.

The Denial stage is characterised by somewhat erratic movements of Fear and Greed index, which seem to also influence the general market to exhibit significant, yet short-lived spikes. Much like human denial, market denial chaotic, but predictable.

The word “dip” is also thrown around a lot — “Buy the dip”, “It’s just a dip bro”, “I can’t believe it’s not dip” and so on. — as some people mark in profits, while others cut their losses.

To sum the denial stage:

• Sudden fluctuations on the Fear and Greed Index
• Short-lived spikes in price, followed by swift corrections
• Appearance of buy-the-dip bros

Acceptance

(March 2022 — TBC)

The acceptance stage of the bear market is easier to spot. The sudden spikes in price are fewer and far between, the Fear and Greed Index sits firmly in the fear position, and the crypto space loses much of its hype. Along with its hype, and paper-handed speculators, the market also loses a significant amount…