What to do when the Bear Market comes? Understand the trap from the history of Bitcoin.

A Bear Market is a period when prices continue to fall. It sounds simple, but it's a trap for Newbies. Why? Because prices often “climb stairs up, take the elevator down” — rising slowly and falling quickly. Once panic spreads and a large number of traders rush to exit, it will lead to a cascading drop.

How Scary is a Bear Market?

There have been several significant bear markets in Bitcoin's history:

• 2014: Fell 86% from the 2013 peak.
• 2017-2018: Bitcoin fell from $20,000 to $3,000, a drop of over 80%, while altcoins suffered even more, casually dropping 90%+
• Impact of the 2020 Pandemic: Although it was a “false alarm”, it also tested the Bear Market low.

The stock market has similar stories - the Great Depression in 1929, the financial crisis in 2008, and the pandemic crash in 2020, all of which caused the index to be halved.

Bear Market vs Bull Market: The Differences You Must Know

Bull Market Characteristics: Prices steadily rise, enthusiasm continues, and there are many buyers.

Bear Market Characteristics:

• The price continues to fall
• Long-term consolidation (sideways) — this is the “torture” mode of the Bear Market
• Trading volume is sluggish, market sentiment is low.
• Without leverage tools (margin/futures), retail investors can only passively wait or cut losses.

How to make money in a Bear Market?

The safest strategy: Withdraw directly or convert to stablecoins, and return when the storm has passed. This poses no pressure for long-term holders.

Want to take the initiative:

1. Profit from Short Selling — Short selling in the futures/margin market, making money by following the downward trend.
2. Rebound Trading — Shorting at the rebound peak (the logic of “dead cat bounce”): In a Bear Market, there will occasionally be rebounds, and continuing to fall after a rebound is the norm.
3. Reverse Operation — Go long during a rebound, but the risk is extremely high and it's easy to get trapped.

Core Principle: Follow the trend. Your trading direction should align with the main trend; do not operate against the wind unless you are very confident in your skills.

Key Reminders

The most common mistake in a Bear Market is “catching falling knives”—buying during a decline, resulting in further losses. Even though Bitcoin has been in a long-term rising channel historically, the losses during short-term Bear Market cycles are still astonishing. The smartest approach is always: wait for clear trend reversal signals before participating, rather than betting on “this time it’s different”.

A bear market is not despair, it's a time to hone your trading mindset.