Bear Market

A bear market usually refers to times when the markets are in a pessimistic state. It is used in situations where there is an expectation that prices will decrease for a long time. Firstly, to be able to say that a financial product has entered a bear market the main trend must be a downtrend. However, prices should be 20% down from the previous high.

Although there is no general opinion about how long the bear market will last, it is usually expected that prices will continue to decrease for a long time.

In this way, demand for products in a bear market is decreasing. Since the demand has decreased, nobody wants to buy those products and the prices continue to fall. It can be understood as a vicious circle.

Why is it Called the Bear Market?

The general belief that the bear market got its current name is because bears swing their claws from top to bottom in case of an attack. The bear metaphor here points to falling prices.

About the Bear Market

A bear market refers to medium and long-term trends rather than short-term market changes. The time period we refer to here as the medium and long term corresponds to months and years.

In addition, a bear market can apply to the entire market or to a single financial asset. Asset prices are expected to reflect current conditions and trend movement is expected to be in line with volume.

Making Investment in the Bear Market

In an environment where a bear market occurs, investors either panic or act overly cautiously and fall into uncertainty. In such a case, investors can make a trend analysis in the healthiest way and apply a strategy that suits the conditions, without making a hasty decision.