What Is a Bear Market? Australia 2026 Crypto Guide
A plain-English Australia 2026 glossary for the term bear market: what it means, where the 20 percent rule comes from, how it differs from a correction, a crash, a recession and a crypto winter, what the 2018 and 2022 crypto bear markets looked like, and the Australian details most explainers skip. Education only — not financial or tax advice.
Quick Answer
A bear market is a sustained, broad fall in prices, usually with pessimistic sentiment, that lasts long enough to feel like the new normal rather than a dip. In share markets the common rule of thumb is a fall of 20 percent or more from a recent high, typically measured on a broad index such as the S&P/ASX 200. Crypto borrows the term but uses it more loosely, because Bitcoin and other coins can move 20 percent without the trend changing. Crypto’s best-known bear markets followed the late-2017 peak (through 2018) and the late-2021 peak (through 2022). The opposite is a bull market. A bear market describes what prices have done; it is not a forecast, a timetable, or a signal to buy or sell.
Bear markets in one screen
A long, broad price fall
Means
20%+ from a recent high
Rule of thumb
2018 and 2022
Crypto examples
A timetable or advice
Not
TL;DR - Quick Takeaways
- A bear market is a sustained, broad fall in prices with pessimistic sentiment, not a single bad day
- The common rule of thumb is a fall of 20 percent or more from a recent high, borrowed from share markets
- Crypto often moves 20 percent without a regime change, so the label is looser there than for the ASX 200
- A bull market is the opposite: a sustained rise with confident sentiment
- Crypto’s best-known bear markets followed the late-2017 peak (through 2018) and the late-2021 peak (through 2022)
- Bear markets tend to cut deeper in crypto because of leverage, platform failures and no earnings to anchor prices
- Nobody can reliably call the top, the bottom, or how long a bear market will last
- Selling at a loss can have Australian tax consequences; looking at a chart does not
- Scams often target people trying to recover losses — check ASIC Moneysmart and Scamwatch
- Education only — join the waitlist for Jittie launch updates
Table of Contents
What a bear market actually means
A bear market is a period when prices across a market fall a long way and keep falling, and most participants expect more of the same. Three ingredients usually travel together: a meaningful drop from a recent high, a drop that is broad rather than limited to one asset, and a mood that has turned from confidence to caution or fear.
The word “market” matters. One coin collapsing while the rest of crypto holds up is a bad stretch for that coin, not a bear market. When people say crypto is in a bear market, they usually mean Bitcoin and most large coins have been falling together for months. When people say the Australian share market is in one, they usually mean a broad index such as the S&P/ASX 200 has fallen a long way from its high.
The word “sustained” matters too. Markets fall on bad days all the time. A bear market is a regime, not an event: the backdrop against which good news gets ignored, rallies fade, and people who bought near the top sit on losses for a long time.
The animal names are old trading slang. The image most people learn is a bear swiping its paws downward while a bull thrusts its horns upward. Another commonly told story traces “bear” to dealers who sold bearskins before they had caught the bear, betting the price would fall first. Either way, bearish now simply means expecting or experiencing falling prices.
A bear market is not an official status. No regulator or exchange declares one. Commentators and data providers apply the label, usually after much of the fall has already happened.
The 20 percent rule of thumb
The most quoted definition comes from share markets. The US Securities and Exchange Commission’s Investor.gov glossary says a bear market generally occurs when a broad market index falls by 20 percent or more over at least a two-month period. Australian banks describe it almost the same way: a fall of 20 percent or more from the recent high.
It is measured from the high, not from where you bought. The label describes the market, not your account. If you bought halfway down, your own loss could be smaller or larger.
It is measured on a broad index. For Australian shares that usually means the S&P/ASX 200. Crypto has no single agreed index, so people use Bitcoin’s price or the total market cap a data site reports, and different baskets can give different answers on the same day.
A fall of roughly 10 to 20 percent from a high is usually called a correction. A correction can reverse, or it can turn into a bear market if the selling continues. You only know which after the fact.
Why crypto bends the rule. The 20 percent line was designed for share indexes that bundle hundreds of companies. Bitcoin can fall 20 percent and recover within weeks without anyone seriously calling it a new bear market, and smaller coins can do that in days. So crypto watchers lean more on the other ingredients: how long prices have been falling, how broad the fall is, whether rallies keep failing, and whether money and attention are leaving. Treat “down 20 percent” in a crypto headline as a starting point for questions, not a verdict.
A worked example, labelled as maths rather than a market reading: an index that peaked at 100 and later traded at 78 would be 22 percent below its high and meet the usual rule of thumb. At 85 it would be 15 percent below, which is usually called a correction. This page does not quote any live index level.
Bull vs bear market, briefly
A bull market is the opposite: a sustained, broad rise in prices with confident sentiment. People who expect prices to rise are bulls; people who expect them to fall are bears. In a bull market dips tend to get bought; in a bear market rallies tend to get sold. Falls are often faster and more violent than rises, and both labels are easiest to apply looking back — the start of a bear market often looks like a normal pullback, and the start of a recovery often looks like another failed rally. Neither term is a forecast. This guide only covers the bear side.
Bear market vs correction, crash, recession and crypto winter
These words get mixed up in headlines. They describe different things.
Correction. A smaller fall, usually around 10 to 20 percent from a high. Corrections are common inside bull markets. Some become bear markets; many do not.
Crash. A very sharp, fast fall over a day or a few days. A crash describes speed; a bear market describes duration and depth. A crash can start a bear market, happen inside one, or be a one-off shock that recovers quickly.
Recession. An economic term about output and jobs, not asset prices. Share-market bear markets sometimes arrive around recessions because profits are expected to fall, but crypto bear markets have happened while the Australian economy kept growing. One does not prove the other.
Crypto winter. Informal slang for a long, quiet crypto bear market: prices stay low, volumes thin out, coverage fades, and some projects run out of money. It is less about the first sharp drop and more about the cold stretch afterwards. Like “bear market,” it has no official start or end date.
What a bear market usually looks like
Many explainers describe bear markets in phases. This is a loose description of how past bear markets have felt, not a model that tells you where you are today.
1. The turn. Prices are near a high and sentiment is still upbeat. Early falls are explained away as healthy pullbacks.
2. The slide. Falls get bigger. Bad news starts to matter. People who borrowed to invest face forced liquidations, adding more selling. This is often where the sharpest drops happen — the moment people call capitulation, selling just to make the pain stop.
3. The false dawns. Prices bounce, sometimes hard, and commentators argue the worst is over. Some of these bear market rallies fail and prices make new lows, wearing confidence down further.
4. The long quiet. Prices drift sideways at low levels, volumes fall and attention moves elsewhere. In crypto, this is usually what people mean by “crypto winter.”
The phases explain why the same market can feel panicked one month and dead the next. They are not a timer. The bottom is only obvious in hindsight.
Past crypto bear markets: 2018 and 2022
Crypto has already been through several deep bear markets. The two most discussed followed the late-2017 and late-2021 peaks. These summaries stay general on purpose: what happened, not exact percentages or a forecast.
2018: after the ICO boom. Prices rose sharply through 2017, helped by a wave of initial coin offerings (ICOs) in which new projects sold tokens directly to the public. After peaking around the end of 2017, prices fell through most of 2018. Bitcoin lost most of its value from that peak over roughly a year, and many smaller tokens fell further or disappeared. Regulators stepped up ICO warnings, and many of those projects never delivered. The quiet period that followed helped popularise the phrase “crypto winter.”
2022: leverage and platform failures. Prices peaked again in late 2021 and fell through 2022, driven by a chain of failures. In May 2022 the algorithmic stablecoin TerraUSD lost its peg to the US dollar and its sister token LUNA collapsed. Lending platforms such as Celsius froze withdrawals, the crypto fund Three Arrows Capital collapsed, and in November 2022 the exchange FTX failed. Many people found that coins they thought were theirs were tied up in a failed company.
Two lessons carry over. First, the price fall was only part of the damage: in 2022 some of the worst losses came from platform failures and high-yield products. Where your crypto is held matters more in a bear market. Second, the story flips at the extremes. Commentators who called crypto unstoppable near the top called it finished near the bottom, and neither was a reliable guide to what came next.
Why crypto bear markets tend to cut deeper
Crypto bear markets have historically been deeper than typical share-market ones. Several features make sharp falls more likely.
No earnings to anchor prices. A share is part of a company with revenue and sometimes dividends, which gives investors a reference point. Most crypto assets have no cash flows. ASIC’s Moneysmart says unbacked crypto is only worth what people are willing to pay. When enthusiasm fades, there is less holding the price up.
Leverage and liquidations. When prices fall, leveraged positions can be closed automatically, pushing prices lower and triggering more liquidations. That loop can turn a fall into a cascade within hours.
Platform risk. As 2022 showed, a bear market exposes platforms that were lending customer assets or taking hidden risks. One failure dents confidence in the rest.
Fragile small coins. Thousands of tokens trade with thin liquidity, and buyers leave those markets first. Seen through bitcoin dominance, Bitcoin’s share can rise simply because other coins are falling harder — relative damage, not a Bitcoin rally.
Stablecoins are not immune. People often move into stablecoins to step out of volatility, but TerraUSD showed that design and backing matter.
No closing bell. Crypto trades around the clock, so big moves can happen overnight while Australian holders are asleep.
How long does a bear market last?
There is no fixed length. Share-market bear markets have ranged from a few weeks — the early-2020 COVID-19 fall was unusually quick, and so was its recovery — to well over a year. In crypto, the falls after the late-2017 and late-2021 peaks each took roughly a year to reach their lows, and prices took longer than that to regain their old highs. Two examples are not a rule.
Length is hard to judge in real time because the start is only clear once you know where the high was, and people date the end differently: from the lowest point, from a set rise off the low, or from a return to the old high.
In crypto, many people link cycles to the Bitcoin halving, the scheduled cut in new bitcoin issuance roughly every four years. Our Bitcoin halving guide explains what it actually is. The supply schedule is real; a reliable bull-and-bear timetable built on a handful of past cycles is not.
This page does not say whether crypto is in a bear market today, where any current cycle stands, or when the next one will start or end.
What people commonly check in a bear market
This is general information about questions people tend to ask when prices fall. It is not a strategy or a recommendation for you.
Do I need this money soon? Money needed for rent, bills or emergencies is the most likely to be sold at a low. Moneysmart says to be prepared to lose what you put into crypto. Our guide on how much Bitcoin beginners consider buying covers sizing.
Am I using borrowed money? Leverage turns a painful fall into a forced sale. The crypto trading basics guide explains margin and liquidation.
Where is my crypto held? In 2022 people lost access to coins because the platform holding them failed. Know whether your provider lends out assets, and how a crypto wallet differs from an exchange account.
Am I reacting to one headline? Our news note Bitcoin Fear Index Hits Extreme Low: Is a Bounce Coming? covered one sentiment reading. A fear score is a mood gauge, not confirmation that a bear market has started or ended, and this page does not predict a bounce.
What about buying regularly? Dollar-cost averaging — a fixed amount on a schedule instead of picking a bottom — avoids timing decisions but guarantees nothing: regular buying into an asset that keeps falling or fails still loses money.
Am I being targeted? Falling markets bring out scammers offering to “recover” lost crypto, guaranteed returns or celebrity trading bots. See the crypto scams guide.
The Australian angle
Most bear-market explainers are written for US readers. Five Australian details are worth separating out.
The ASX benchmark. When Australian media say the local share market is in a bear market, they usually mean the S&P/ASX 200 is about 20 percent or more below its high. Crypto is a separate market; one being in a bear market does not mean the other is.
AUD versus USD. Bitcoin is usually quoted in US dollars, but Australians buy and sell in Australian dollars. Because AUD/USD moves too, a fall measured in US dollars can look bigger or smaller in AUD. Before applying a US headline’s percentage to yourself, check the AUD price.
Your super already lives through bear markets. Many Australians first notice a share-market bear market on their super statement, because most funds hold shares. Bear markets are a normal, if unpleasant, part of long-term investing in growth assets — and crypto’s falls have historically been deeper and faster than the markets most super funds are built around.
Tax happens when you dispose, not when prices fall. Watching prices drop is not a tax event. Selling, swapping or spending crypto generally is a CGT event either way. Selling below your cost base can create a capital loss, which can generally offset capital gains (now or carried forward) but not wages. The ATO has also warned about wash sales — selling and quickly rebuying mainly to create a tax loss. Keep records and check ATO guidance or a registered tax agent. Students can see our crypto tax guide for Australian students.
Where to check before you act. ASIC’s Moneysmart crypto assets page explains crypto’s risks in plain English, including volatility, unlicensed providers and theft. Scamwatch, run by the ACCC, says Australians lose more money to investment scams than any other type, and that crypto lost to scams is rarely recovered.
Eagle BTM Pty Ltd ACN 659 281 820 publishes this education site and is an AUSTRAC-registered DCE/VASP. AUSTRAC registration is not an Australian financial services licence, and nothing here is a recommendation to buy, sell or hold any asset. Jittie is in pre-launch. Join the waitlist for launch updates.
Frequently Asked Questions
What is a bear market in simple terms?
A bear market is a long stretch where prices across a market keep falling and most participants feel pessimistic. It is not one bad day or one bad week. In share markets the usual shorthand is a fall of 20 percent or more from a recent high. In crypto the same words are used more loosely, because prices can swing that much without the wider trend changing.
What is the 20 percent rule for a bear market?
It is a convention, not a law. The US SEC’s Investor.gov glossary says a bear market generally occurs when a broad market index falls by 20 percent or more over at least a two-month period. Australian banks describe the same idea using a fall of 20 percent or more from the recent high. A fall of roughly 10 to 20 percent is usually called a correction instead.
What is a bull market vs a bear market?
A bull market is a sustained rise in prices with confident sentiment. A bear market is a sustained fall with pessimistic sentiment. The usual image is a bull thrusting its horns up and a bear swiping its paws down. The labels describe what has already happened; neither tells you what happens next.
How long does a bear market last?
There is no fixed length. Share-market bear markets have ranged from a few weeks to well over a year. In crypto, the moves after the late-2017 and late-2021 peaks each took roughly a year to reach their lows, and prices took longer than that to recover. Past lengths are a sample, not a schedule, and this page does not predict the current cycle.
Is a bear market good or bad?
It depends on your situation, which is why this guide does not give a verdict. Bear markets are painful for anyone who needs to sell, has borrowed to invest, or held assets on a platform that failed. Some long-term investors see lower prices differently. Either way, a bear market is a description of falling prices, not a recommendation to buy or sell.
What is a crypto winter?
Crypto winter is informal slang for a long, quiet crypto bear market: prices stay low, trading volumes and news coverage fade, and projects run short of funding. It describes mood and activity as much as price. There is no official start or end date.
What is a bear market rally?
A bear market rally is a sharp but temporary rise inside a longer downtrend. These rallies can be large enough to feel like the end of the bear market, then fade. Because they are only obvious in hindsight, they are a big reason people struggle to time the bottom.
Does a bear market mean a recession?
No. A bear market is about asset prices. A recession is about the wider economy, usually measured through output and jobs. They sometimes overlap, but crypto has had bear markets while the Australian economy kept growing, and share markets have fallen into bear territory without a recession following.
Is selling crypto in a bear market a tax event in Australia?
Selling, swapping or spending crypto is generally a CGT event in Australia, whether prices are up or down. A sale below your cost base can create a capital loss, which can generally be used against capital gains but not against wages. The ATO has also warned about wash sales. Watching prices fall is not a tax event. Check the ATO or a registered tax agent for your own situation.
Is a bear market the same as a low Fear and Greed reading?
No. A fear index is a sentiment score built from a publisher’s own recipe. A bear market is a description of a sustained price trend. Fear readings are often low during bear markets, but a single extreme reading does not confirm one has started or ended.
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Jittie Editorial Team
Crypto Education Specialists
Our team of crypto experts and financial educators are passionate about making cryptocurrency accessible to all Australians. With backgrounds in blockchain technology, finance, and education, we create clear, accurate guides to help you navigate the crypto world safely.