Glossary · B
Bear Market
A sustained period of declining asset prices — typically defined as a fall of 20% or more from recent highs. Crypto bear markets have historically been severe, with assets falling 70-90% from peak to trough. The 2022 bear market saw DeFi TVL fall from ~$180B to under $40B.
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How Bear Market works in practice
A bear market is a sustained decline with falling activity. Yields compress, leverage unwinds, and the protocols that survive tend to be the ones whose revenue never depended on emissions.
Worked example
Borrowing demand falls, so lending rates fall with it. Farms paying in their own token see that token's price drop, and the advertised yields collapse even where the emission schedule is unchanged.
Figures are illustrative and chosen to be checkable, not live market data.
The mistake that costs people money
Falling prices trigger liquidations, which force selling, which pushes prices lower. Positions sized for calm markets are exactly the ones that fail in this feedback loop.
Bear Market: common questions
- What is Bear Market?
- A sustained period of declining asset prices — typically defined as a fall of 20% or more from recent highs. Crypto bear markets have historically been severe, with assets falling 70-90% from peak to trough. The 2022 bear market saw DeFi TVL fall from ~$180B to under $40B.
- How does Bear Market work in practice?
- A bear market is a sustained decline with falling activity. Yields compress, leverage unwinds, and the protocols that survive tend to be the ones whose revenue never depended on emissions.
- Can you give an example of Bear Market?
- Borrowing demand falls, so lending rates fall with it. Farms paying in their own token see that token's price drop, and the advertised yields collapse even where the emission schedule is unchanged.
- What do people get wrong about Bear Market?
- Falling prices trigger liquidations, which force selling, which pushes prices lower. Positions sized for calm markets are exactly the ones that fail in this feedback loop.