10-25-2022, 06:21 PM
Bear market length misconception: I've noticed a lot of people seem to believe that
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/yd8at3/bear_market_length_misconception_ive_noticed_a/"> <img src="https://external-preview.redd.it/cyN8O7hlo5-CiLN8kG-1A1RTOc98d4YDg3Qg-lv9rdE.jpg?width=640&crop=smart&auto=webp&s=1382cfade976e03ecce7a70f71d498be0b60b4ab" alt="Bear market length misconception: I've noticed a lot of people seem to believe that traditional bear markets typically last multi-years. And there's also confusion about the duration of past bear markets in crypto. Here's some data and some light shed on this." title="Bear market length misconception: I've noticed a lot of people seem to believe that traditional bear markets typically last multi-years. And there's also confusion about the duration of past bear markets in crypto. Here's some data and some light shed on this." /> </a> </td><td> <!-- SC_OFF --><div class="md"><p>On average, a bear market in traditional markets lasts around 290 days.</p> <p>Since the Great Depression, there have been 14 bear markets lasting between 1 month and 1.7 years.</p> <p>Source: <a href="https://www.investopedia.com/a-history-of-bear-markets-4582652">https://www.investopedia.com/a-history-of-bear-markets-4582652</a></p> <p><a href="https://www.forbes.com/sites/qai/2022/08/24/the-average-bear-market-lasts-289-days-how-long-do-we-have-left/">https://www.forbes.com/sites/qai/2022/08/24/the-average-bear-market-lasts-289-days-how-long-do-we-have-left/</a></p> <p><a href="https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/bear-markets.html">https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/bear-markets.html</a></p> <p>What about crypto?</p> <p>In the most basic definition of a bear market, the previous crypto bear markets lasted roughly a year:</p> <p>2014 bear market: 405 days</p> <p>2018 bear market: 364 days</p> <p>​</p> <p>But let's look at the more extended definition including the full bear winter for the 2018 bear market:</p> <p>​</p> <p><a href="https://preview.redd.it/ka4wyjmozyv91.jpg?width=1640&format=pjpg&auto=webp&s=201767a790beacc453c2d8ac0c7b199208cab987">2018 bear market</a></p> <p>If we go with the pivot point where any downtrend ended (beyond the lowest low), and the uptrend started, then a full bear market for the 2018 cycle would be 417 days.</p> <p>If we go all the way to the breakout and confirmation, then 509 days.</p> <p>So even in the most stretched definition of a bear market, we are looking at 1 year 4 months, and 23 days. Still not multi-year.</p> <h1>The definition of a bear market.</h1> <p>This is probably where the confusion lies.</p> <p>I think some people believe that we are always in a bear market until we break past the previous ATH. We could go for 5 years of upward trend and positive years, they would still think it's a bear market until it breaks a new ATH.</p> <p>Some people even only believe that everything is a bear market, unless prices go parabolic.</p> <p>But that's not what a bear market means. And for something as volatile as crypto, that's definitely not the type of stretched definition to go by.</p> <p>You can be in a full bull market that never returns to ATH.</p> <p>A bear market is simply an extended period of downtrend, lower lows and lower highs. Which can be as short as just multi-weeks.</p> <p>In traditional markets, for indices, you usually talk about prices moving down by at least 20%.</p> <p>For crypto, the mean volatility is much higher, so you would likely talk about drops of more than 40%.</p> <p>In addition, bear markets are measured by sentiments, like the fear and greed index. They would also be deep in the fear side for an extended period.</p> <p><a href="https://www.investopedia.com/terms/b/bearmarket.asp">https://www.investopedia.com/terms/b/bearmarket.asp</a></p> <p><a href="https://www.amgfunds.com/research-and-insights/keep-calm-and-remain-diversified/a_closer_look_at_historical_bear_markets/">https://www.amgfunds.com/research-and-insights/keep-calm-and-remain-diversified/a_closer_look_at_historical_bear_markets/</a></p> <h1>The halving misconception.</h1> <p>There is also a misconception that you have to wait for the Bitcoin halving before a bear market ends.</p> <p>That simply hasn't been true.</p> <p>The last bear market ended 1 year and 3 months before the last halving.</p> <p>The 2014 bear market ended 9 months and 8 days before the halving.</p> <p>This is going by the more generous pivot definition of a bear market.</p> <h1>When is a bear market officially over?</h1> <p>This is the more difficult part of the definition, and the part where even experts disagree.</p> <p>The simplest definition is in retrospective from the top of the price drop to the bottom.</p> <p>But many economists would argue that there would have to be an uptrend and at least a pivot into an uptrend first. While others believe there needs to be a real breakout and confirmation. As I've illustrated above with the 2018 chart.</p> <p>Ultimately, it will come down to market sentiments, when it's no longer overly dominated by bearish sentiments and fear, and no longer dropping to lower highs and lower lows.</p> <p>So it's a bit of a murky definition with some grey areas. So understandably, not everyone is going to be on the same page on this.</p> <p><a href="https://www.reuters.com/markets/europe/what-is-bear-market-2022-06-15/">https://www.reuters.com/markets/europe/what-is-bear-market-2022-06-15/</a></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/fan_of_hakiksexydays"> /u/fan_of_hakiksexydays </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/yd8at3/bear_market_length_misconception_ive_noticed_a/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/yd8at3/bear_market_length_misconception_ive_noticed_a/">[comments]</a></span> </td></tr></table>
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/yd8at3/bear_market_length_misconception_ive_noticed_a/"> <img src="https://external-preview.redd.it/cyN8O7hlo5-CiLN8kG-1A1RTOc98d4YDg3Qg-lv9rdE.jpg?width=640&crop=smart&auto=webp&s=1382cfade976e03ecce7a70f71d498be0b60b4ab" alt="Bear market length misconception: I've noticed a lot of people seem to believe that traditional bear markets typically last multi-years. And there's also confusion about the duration of past bear markets in crypto. Here's some data and some light shed on this." title="Bear market length misconception: I've noticed a lot of people seem to believe that traditional bear markets typically last multi-years. And there's also confusion about the duration of past bear markets in crypto. Here's some data and some light shed on this." /> </a> </td><td> <!-- SC_OFF --><div class="md"><p>On average, a bear market in traditional markets lasts around 290 days.</p> <p>Since the Great Depression, there have been 14 bear markets lasting between 1 month and 1.7 years.</p> <p>Source: <a href="https://www.investopedia.com/a-history-of-bear-markets-4582652">https://www.investopedia.com/a-history-of-bear-markets-4582652</a></p> <p><a href="https://www.forbes.com/sites/qai/2022/08/24/the-average-bear-market-lasts-289-days-how-long-do-we-have-left/">https://www.forbes.com/sites/qai/2022/08/24/the-average-bear-market-lasts-289-days-how-long-do-we-have-left/</a></p> <p><a href="https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/bear-markets.html">https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/bear-markets.html</a></p> <p>What about crypto?</p> <p>In the most basic definition of a bear market, the previous crypto bear markets lasted roughly a year:</p> <p>2014 bear market: 405 days</p> <p>2018 bear market: 364 days</p> <p>​</p> <p>But let's look at the more extended definition including the full bear winter for the 2018 bear market:</p> <p>​</p> <p><a href="https://preview.redd.it/ka4wyjmozyv91.jpg?width=1640&format=pjpg&auto=webp&s=201767a790beacc453c2d8ac0c7b199208cab987">2018 bear market</a></p> <p>If we go with the pivot point where any downtrend ended (beyond the lowest low), and the uptrend started, then a full bear market for the 2018 cycle would be 417 days.</p> <p>If we go all the way to the breakout and confirmation, then 509 days.</p> <p>So even in the most stretched definition of a bear market, we are looking at 1 year 4 months, and 23 days. Still not multi-year.</p> <h1>The definition of a bear market.</h1> <p>This is probably where the confusion lies.</p> <p>I think some people believe that we are always in a bear market until we break past the previous ATH. We could go for 5 years of upward trend and positive years, they would still think it's a bear market until it breaks a new ATH.</p> <p>Some people even only believe that everything is a bear market, unless prices go parabolic.</p> <p>But that's not what a bear market means. And for something as volatile as crypto, that's definitely not the type of stretched definition to go by.</p> <p>You can be in a full bull market that never returns to ATH.</p> <p>A bear market is simply an extended period of downtrend, lower lows and lower highs. Which can be as short as just multi-weeks.</p> <p>In traditional markets, for indices, you usually talk about prices moving down by at least 20%.</p> <p>For crypto, the mean volatility is much higher, so you would likely talk about drops of more than 40%.</p> <p>In addition, bear markets are measured by sentiments, like the fear and greed index. They would also be deep in the fear side for an extended period.</p> <p><a href="https://www.investopedia.com/terms/b/bearmarket.asp">https://www.investopedia.com/terms/b/bearmarket.asp</a></p> <p><a href="https://www.amgfunds.com/research-and-insights/keep-calm-and-remain-diversified/a_closer_look_at_historical_bear_markets/">https://www.amgfunds.com/research-and-insights/keep-calm-and-remain-diversified/a_closer_look_at_historical_bear_markets/</a></p> <h1>The halving misconception.</h1> <p>There is also a misconception that you have to wait for the Bitcoin halving before a bear market ends.</p> <p>That simply hasn't been true.</p> <p>The last bear market ended 1 year and 3 months before the last halving.</p> <p>The 2014 bear market ended 9 months and 8 days before the halving.</p> <p>This is going by the more generous pivot definition of a bear market.</p> <h1>When is a bear market officially over?</h1> <p>This is the more difficult part of the definition, and the part where even experts disagree.</p> <p>The simplest definition is in retrospective from the top of the price drop to the bottom.</p> <p>But many economists would argue that there would have to be an uptrend and at least a pivot into an uptrend first. While others believe there needs to be a real breakout and confirmation. As I've illustrated above with the 2018 chart.</p> <p>Ultimately, it will come down to market sentiments, when it's no longer overly dominated by bearish sentiments and fear, and no longer dropping to lower highs and lower lows.</p> <p>So it's a bit of a murky definition with some grey areas. So understandably, not everyone is going to be on the same page on this.</p> <p><a href="https://www.reuters.com/markets/europe/what-is-bear-market-2022-06-15/">https://www.reuters.com/markets/europe/what-is-bear-market-2022-06-15/</a></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/fan_of_hakiksexydays"> /u/fan_of_hakiksexydays </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/yd8at3/bear_market_length_misconception_ive_noticed_a/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/yd8at3/bear_market_length_misconception_ive_noticed_a/">[comments]</a></span> </td></tr></table>