A bear market occurs when stock prices fall 20% or more from recent highs and remain there for an extended period. This downward trend typically reflects declining investor confidence and negative economic sentiment.

The term "bear" originates from the way bears attack their prey – swiping downward with their paws, symbolizing falling markets. In contrast, bulls attack by thrusting upward with their horns, representing rising markets.

During a bear market, several key events typically occur:

• Stock prices decline significantly
• Trading volume decreases
• Market volatility increases
• Investor sentiment becomes pessimistic
• Companies may reduce workforce and spending

Common causes of bear markets include:

• Economic recessions
• Global crises or pandemics
• High inflation or interest rates
• Major geopolitical events
• Bursting of market bubbles

The average bear market lasts 289 days, though duration can vary significantly. The most recent notable bear market occurred during the COVID-19 pandemic in 2020:

• Started: February 2020
• Ended: March 2020
• S&P 500 decline: 34%
• Recovery: Reached new highs by August 2020

Contrarian investing strategies during bear markets have historically proven successful:

• Buy quality assets at discounted prices
• Focus on companies with strong fundamentals
• Maintain a long-term perspective
• Diversify investments across sectors

Cryptocurrency markets experience their own bear cycles, often with more extreme price swings than traditional markets. Bitcoin, for example, has seen multiple bear markets with drops exceeding 80%.

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