What is a Bear Market / Bull Market?
A bear market is a sustained period of falling prices, conventionally defined as a 20% or greater decline from recent highs. A bull market is the opposite. Bitcoin moves through dramatic versions of both, often tied to the four-year halving cycle, though the pattern shows signs of fading as the asset matures.
Why It Matters
Bitcoin's history is the history of its cycles. Knowing where you are in one matters more than knowing where the price will go.
Every Bitcoin bull market so far has been followed by a bear market that wiped out 70-85% of the high. After the 2013 peak (~$1,100), Bitcoin crashed to $170. After the 2017 peak (~$20,000), it crashed to $3,200. After the 2021 peak (~$69,000), it crashed to $15,500. Each crash felt different. Each crash followed the same shape. The four-year cycle has historically lined up with the halving, though the rise of ETF demand may be reshaping how cycles play out.
Most retail investors enter near the peak. Media coverage spikes, FOMO does the rest. Then the bear market arrives and most of them sell. Long-term holders who keep buying through the bears tend to outperform everyone who tries to time the cycle. The skill the market punishes is patience. The discipline the market rewards is buying when it hurts. See the historical playthroughs on the DCA Calculator.
How It Works
The technical definition is simple: a 20% drop from a recent high marks the start of a bear market. The colloquial usage is looser. Most people don't call it a bear market until they're already losing money. Most people don't call it a bull market until prices have already doubled.
Bitcoin's volatility is unusual. Bear markets see 70-85% drawdowns. Bull markets multiply prices 5x to 20x in a year or two. Both extreme by the standards of traditional finance. Extreme either way.
The halving cycle has historically structured these moves. Bitcoin tends to bottom in the year before a halving. Rally hard for 12-18 months after. Then peak and reverse into the next bear. The 2012, 2016, and 2020 cycles all followed this pattern roughly. The 2024 cycle is still unfolding, and the rise of institutional ETF demand may be reshaping how cycles play out by smoothing the demand curve that retail-led cycles historically produced in their characteristically violent way.