This article is reprinted with authorization from "Talking Outside the Box," and the copyright belongs to the original author.

With the recent fluctuations in the market, I have noticed that many people seem to be discussing the bear market, but I wonder if you have really taken the time to calmly think about what a bear market actually is?

Perhaps for most retail investors, the common understanding is that as long as the market continues to decline, it is a bear market, even though BTC is still maintaining a relatively high range of $90,000.

Many people often tend to first see a result and then try to find reasons to convince others based on that result. For example, BTC has dropped from its historical high of $126,000 in October to $90,000 now (November 18). Some people will list various reasons for this market decline, including macroeconomic reasons, institutional reasons, policy reasons, cyclical reasons, etc., and then firmly tell others that the market is currently in a bear market.

More rational individuals might think that the concept of a bear market should be relative. If your cost is $20,000, then it still feels like a bull market to you, while if your cost is $120,000, you would certainly consider it a bear market.

From a personal intuitive perspective, as long as you have a reasonable understanding, there is no right or wrong for yourself. However, we should also try to avoid falling into a new cognitive bias, such as the cost perception bias mentioned above. This means you can understand it subjectively but should not convince others that losing money means it is a bear market, while making money means it is a bull market.

Different people may have different definitions of a bear market, including price-based definitions (considering it a bear market if it falls below MA200) and sentiment-based definitions (thinking it is a bear market when most people say so).

In previous articles, we have discussed the issue of changes in market structure several times. Strictly speaking, we should treat or consider the bull/bear markets of Bitcoin separately from those of altcoins.

Looking back over a larger time frame: since the bottom was reached in the second half of 2022, BTC has been in a structurally rising cycle from 2023 to 2025. However, in contrast, the performance of most altcoins has been significantly weaker than BTC (remaining in a long-term downtrend or sideways).

This clear structural difference is markedly different from past bull and bear cycles.

For example, during the bull market in 2017, those who experienced it should still have some impression. At that time, it felt like during the peak of sentiment, almost all altcoins would see remarkable gains, with 10x or even 100x increases not being unusual. However, during that bull market, institutions had not yet concentrated their investments, and the market was more driven by retail sentiment.

Similarly, in the 2021 bull market, the overall state was quite similar to 2017, compounded by macro factors and the global liquidity surge caused by the COVID-19 pandemic, many altcoins also achieved gains of over 10x. However, at the start of that bull market, we already saw celebrities like Elon Musk becoming active in this field, and some institutions were trying to understand or participate in this area. At that time, the market was more driven by retail sentiment combined with massive liquidity.

Each cycle begins with a different story, but because some similar or identical results may occur during the process, it is often believed by some that the same outcome will occur in the future.

However, the world is unpredictable, and this should be especially true from an investment perspective. If an asset (or a class of assets) is driven by retail speculative sentiment, then the speed and magnitude of price increases and decreases will be very pronounced. The various Memecoins we have experienced in this cycle are almost like this, with lifecycles from birth, peak, to zero possibly taking just a few hours. Conversely, if an asset or class of assets is driven by institutions and macroeconomic factors, then changes in economic policy may lead to the inability of some assets to sustain their price increases. In summary, when we realize that an asset or class of assets begins to lack structural support during its price increase, then that increase may not be sustainable, and it could potentially fall into a new bear market.

Since this bull market has progressed from 2022 to now, with Bitcoin rising from a relatively low point of $15,000 to over $126,000, we should seriously consider a question: what has been supporting the market's rise in this cycle?

This is the core reason that could lead to a bear market.

We have actually shared and discussed this issue of structural change in some of our previous articles. To summarize, this bull market is supported by a new structural bull market led by institutions and ETFs (with macro environment, U.S. national reserves, and global risk asset preference changes as auxiliary support).

Therefore, this bull market is fundamentally different from the bull markets of 2017 and 2021. Many people may still believe, based on historical experience or partial personal feelings, that this bull market is still a retail-driven emotional bull market, but we believe this is not entirely the case.

If we carefully review some market changes over the past two years, we should also be able to feel that the way retail investors participate in this cycle has undergone some structural changes. The concentrated FOMO seen in the previous two bull markets seems to have gradually transformed into a more dispersed participation method (and retail participation seems to be continuously decreasing, with more focus on gambling in Meme games). At the same time, the psychology of retail investors has also undergone significant changes. In other words, the rise of Bitcoin from $15,000 to $126,000 in this bull market does not seem to have fully relied on retail FOMO sentiment (institutions provided bottom support, while retail FOMO only provided a temporary acceleration), and now, more and more retail investors seem to be adopting some so-called institutional thinking, beginning to view Bitcoin as a risk-hedging asset rather than merely a speculative asset.

This structural change and the psychological shift among retail investors may not seem like a bad thing at the moment. As we mentioned in our article on March 12, starting from this cycle, investment logic has begun to slowly change. Those purely speculative approaches are gradually shifting towards focusing on things or assets that can sustainably create value. From a certain perspective, this is also a sign that the crypto market is becoming more mature.

In our previous article (November 12), we also discussed that we may currently be at the beginning of a new transformative era, with old whales continuously exiting and new buyers (represented by institutions as new long-term investors) starting to enter the market. The ownership (pricing power) of Bitcoin is continuously shifting from the visionary and patient ancient whales to institutions, and Bitcoin is beginning to experience a new lifecycle.

Here, I would also like to address a comment from the previous article: why do you believe that old whales are exiting?

This is also based on on-chain data. If anyone is interested, you can check it out through data platforms like Glassnode. According to rough statistics from on-chain data (which is not 100% precise and can only reflect certain trends rather than absolute values), it can be observed that the proportion of BTC held by old whale addresses (wallet addresses from before 2016) has decreased from 41% in 2023 to the current 27%. Meanwhile, the proportion held by ETFs and listed companies (like MSTR, Metaplanet, etc.) has now exceeded 12%, and this number is continuing to increase, with an expected share of over 20% by 2026.

Returning to the main topic, as for how long this new lifecycle will last and what will happen during it, no one knows, and no one can accurately predict the future. I remember we mentioned in our article on April 14 that for you, this may be the worst "era," but it is also the best "era." The market is full of uncertainties, which creates various opportunities. Only those who can endure various uncertainties are likely to achieve long-term and ultimate victory.

A true bear market is not caused by how much the price has dropped; its underlying logic is often that the driving force supporting the market structure's rise has disappeared.

So far, if we only consider the ETF perspective, we have not seen this driving force completely disappear. We are merely transitioning from a "sustained net inflow" to a "slowing net inflow." Based on public data from the Farside platform, I roughly categorized the inflow into several stages:

Sustained net inflow phase: From March 2024 to March 2025, the average weekly inflow into ETFs was $6-10 billion.

Slowing net inflow phase: From April 2025 to August 2025, the average weekly inflow into ETFs was $2-4 billion.

Since September 2025, the average weekly inflow into ETFs has only been $800 million to $1.5 billion, showing a noticeable marginal decrease, which seems to be a risk signal. When this net inflow completely stops or continues to net outflow, we may then face a true bear market.

The new bear market will also be different from previous ones. For example, the bottom for Bitcoin will likely be higher (a bear market bottom of $50,000 to $60,000 is not impossible), and Bitcoin's price movements will become increasingly stable (the slope will slow down).

In short, whether it is a bull market or a bear market, discussing these topics is not problematic in itself, as the process of discussion and exchange is also a process of thinking and optimization. However, directly engaging in a debate with others about whether we are in a bear or bull market is not very meaningful. The key consideration should be: how do you view bull and bear markets? How will you respond to the constantly changing market structure? What role do you play in this game of changing market structures?

Due to the recent significant market fluctuations, many friends have been asking me repetitive questions, such as: Can I buy the dip now? Will it continue to fall? What do you think the lowest it will drop to is? Do you think there will be opportunities to rise this year?…

In fact, we have often discussed similar questions in past articles. In my view, there are no standard answers to these questions. If you base your trading operations (hopes of making money) solely on asking others similar questions and hoping for some certainty in their responses, then losses are likely to be the outcome you will ultimately face.

Strictly speaking, my (and other bloggers or KOLs online) views on the bottom or top are not important, as everyone's position size, risk preferences, etc., are different. What matters is how you define the bottom/top for yourself.

Let me give you the simplest example:

If your timeframe for thinking is one week, then the current price of $89,000 (as of November 18) could potentially be the bottom, and you might consider allocating a certain percentage of your position to bet on a rebound.

If your timeframe is 1-3 months, then $80,000 could also be the bottom.

If your thinking range is 6-12 months, then $70,000, or even $60,000, also has a certain probability of becoming the bottom. Who knows such things?!

Or, if you have a relatively high degree of confidence within your thinking range and can accept a drawdown greater than 30% (loss), then it’s fine to be fully invested right now, as long as your position allows you to feel relaxed and sleep well. If you don’t have that much confidence and a drawdown greater than 20% causes significant personal anxiety, or if your current position is seriously affecting your sleep quality, then you should consider reducing your position to half or continue to lower it. If your thinking range is 3-5 years into the future, then whether it’s $90,000 or $80,000 now doesn’t really matter; you can choose to continue dollar-cost averaging or keep learning and observing. You must learn to acknowledge that the market is always right. If you can’t sleep at night, it means your position is too heavy; just reduce your position instead of coming over to ask me if this is the bottom or whether it will rise in the next few days.

In short, you should trade according to what type of trader you are; trading without a style is equivalent to gambling.

For long-term investors, they may not care about short-term fluctuations and can continue to buy into assets they believe in over the years, similar to Warren Buffett, but this is difficult for ordinary people to achieve.

For left-side traders, some will trade based on weekly charts, buying when the market has dropped significantly and selling when it has risen significantly. They don’t need to consider precise bottom-fishing or top-selling; they will have their own trading plans and discipline, rather than always hoping to buy at the lowest point and sell at the highest point like ordinary retail investors.

For right-side traders, they also have their own trading logic. For example, some may use technical analysis (candlestick charts) to decide when to enter or exit, while others may use news to make those decisions… They buy when it’s time to buy and sell when it’s time to sell (to achieve short-term profit targets or trigger stop-loss orders), making decisive decisions based on rationality and planning, rather than being irrationally attached or fantasizing.

Of course, whether it’s long-term trading, medium-short term trading, or frequent swing trading, each has its own advantages and issues. Strictly speaking, there is no trading type that is the best and 100% consistently profitable; only what you can fully understand and what suits you is the best.

The core of trading operations boils down to two points: understanding changes in market structure and formulating a position management plan that aligns with your personal risk preferences.

Everyone in the market wants to make money, but if everyone thinks this way, then whose money are you making in the market? For us, trading is not about blindly pursuing wealth or gambling. Past failures and successes have repeatedly pointed us in the right direction: we must form our own Plan A (how we think, what we should do, how to do it, and to what extent) while always remembering to keep a Plan B (in case of failure, what our response plan is).

Related: Bitcoin (BTC) ETF outflows reach $1.1 billion, analysts warn of a potential "mini" bear market at a critical moment.

Original text: “What Exactly Is a Bear Market?”

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