Bitcoin is experiencing the "mildest" bear phase in its history, yet market sentiment remains persistently gloomy. The first cryptocurrency has lost about half its value from the peak of early October 2025, while past downturns pulled the price down by 77–84%.
The popular market sentiment indicator has barely left the fear zone for almost all of 2026, occasionally plunging into its extreme stage for record-long periods. This is despite the fact that both previous bear market bottoms, in 2018 and 2022, preceded a multiple increase in price — history clearly shows where to look for profit. Yet participants massively exit the game precisely when they should stay.
A bear market tests not courage, but discipline. Let's break down which strategies allow you to profit from the decline, what dangers each carries, and by what signs you can recognize the approaching bottom.
Where the "bear" came from
In the classic sense, a bear market is a price decline of 20% or more from a previous peak, lasting for a relatively long time. From a technical analysis perspective, it is characterized by a series of successively lower highs and lows on the chart. Essentially, it's a shift in market sentiment: faith in unstoppable growth gives way to caution, and then to fear.
The cryptocurrency market is also subject to cyclicality, but with double the amplitude. While a 20% decline is considered bearish for the stock market, Bitcoin typically loses significantly more during its cycles. CoinGecko Research analytics shows that three past bear markets cut the first cryptocurrency by 77% to 84% from its peaks: in 2018–2019 — 83.6%, in 2014–2015 — 81.6%, and in 2022–2023 the price crashed from $67,617 to $15,742 — a drop of 76.7%.
Against this backdrop, the current decline is the most forgiving in the asset's history: a 51% drop compared to previous declines of over 70%. However, in terms of duration, the current bear phase is already among the longest.
The drawdown affects not only price but also liquidity. The cascade of liquidations on "Black Saturday" in October 2025 significantly reduced market depth, and it has not been quickly restored. A sparse order book reacts more sharply to every large trade, and price swings become more volatile.
Discount or Trap
At the bottom of a bear market, entry points appear that seem unbelievably attractive at the peak of euphoria. Fidelity data shows: from the December 2018 low of around $3,200, Bitcoin grew more than 20-fold by November 2021 — to $69,000. The subsequent drop to $15,500 in November 2022 turned into price levels around $126,000 by October 2025 — nearly 700% above the bottom level.
But to catch the bottom, you first have to wait for it. Every past bear market consumed at least 77% of the first cryptocurrency's market value, while current levels are only about 50% below the October peak. If the market repeats even the mildest scenario of past cycles, the price could fall to approximately $29,000 — half of current levels.
Furthermore, an oversold condition can persist much longer than investors expect. Some cheapened assets will never recover: the downturn exposes weak tokenomics and doomed-to-fail projects.
Instead of trying to guess the turning point, you can regularly buy the asset in small portions. This approach eliminates the need to catch the bottom and "falling knives": equal amounts invested at regular intervals generally provide a more favorable entry price than betting on a single "right" moment.
However, this strategy also has limitations. It helps reduce the risk of poor entry timing but does not protect against the overall downtrend: if the market continues to fall, subsequent purchases will also become cheaper.
Only invest free funds that won't be needed in the near future; otherwise, you may have to sell at a loss precisely when money is urgently needed.
Averaging and accumulation are long-term games. For those who want to profit from the decline itself, rather than wait it out, the market offers instruments that work on the downside.
Betting Against the Market
The most direct way to turn a decline into profit is short selling, or shorting. A trader borrows an asset from the exchange, immediately sells it at the current price, and when the price drops, buys it back cheaper, returns the loan, and keeps the difference. Such a position can be opened on most platforms using the margin trading section or through perpetual futures, "perps".
The main drawback of short selling is the asymmetry of risk. While the maximum loss when buying an asset is limited to the invested amount, potential losses in a short theoretically have no limit: the price can rise indefinitely. Therefore, position size and a predetermined stop-loss level are crucial.
For those who dislike unlimited risk, the market offers instruments with a known maximum loss. A put option gives the right to sell an asset at a fixed price: if the price falls, the contract becomes more expensive; if it rises, only the premium paid for it is lost. Inverse products behave similarly — their value rises when the underlying asset falls. In both cases, you can only lose what you invested — no more.
But declines rarely follow a straight line. In a bear market, prices often move in spurts, and it's easiest to get burned on short-term bounces.
Saw Instead of Trend
During the height of a bear phase, long stretches of sluggish price declines are interrupted by brief "dead cat bounces." They spark hope but almost always fizzle out — and the buyer who believed in a reversal is left "underwater" at a local peak. Such a trap is easily mistaken for the start of a rally, and it's where most beginners get caught.
At this stage of the cycle, the composition of participants also changes. Leverage enthusiasts and some retail investors leave the market, but large holders, whales, begin methodically accumulating positions at depressed prices. Competition for profitable trades weakens, and technical patterns become cleaner and more predictable.
While the trend stagnates in a horizontal corridor, many trade within a range: buying at the lower boundary, selling at the upper. This technique works only as long as the market is in a sideways pattern and does not show a new wave of decline.
Another response to the choppy rhythm is scalping and intraday trading: quick trades on local fluctuations without the risk of holding a position overnight. A bear market often produces repeating patterns during individual trading sessions, providing fertile ground for those who like to capture small profits repeatedly.
The common enemy of all these techniques is emotions. A sudden bounce ignites excitement and a desire to recoup losses, and yesterday's discipline crumbles under the urge to "not miss out." Add to this low liquidity with wide spreads and slippage — and the cost of a mistake in a bear market is significantly higher than in a bull market.
Playing the downside requires attention and strong nerves. But you can also profit during a bear period without staring at the charts — simply by letting your capital work for itself.
Earn While You Wait
While the market searches for support, capital doesn't have to sit idle. Staking Ethereum yields about 2.8% annually — not the 4–7% of a couple of years ago: the more coins locked in the network, the less reward each validator receives. It is paid in ETH, so in dollar terms it often diminishes amid market downturns.
For those who want to weather the storm in a safe haven, earning on stablecoins is suitable: capital remains in dollar equivalent and generates interest income — often higher compared to staking, around 5–10% annually. However, during a downturn, such rates usually decline, and particularly high yields may hide additional risks: counterparty problems or depegging — a stablecoin losing its peg to the target price.
A more active approach is yield farming: providing liquidity to DeFi protocols for fees and tokens. Yields here are higher, but so are the pitfalls — impermanent loss and the risk of smart contract vulnerabilities.
Standing apart are delta-neutral strategies: profiting from differences in funding rates and market imbalances, without predicting the direction of the price. This is a complex tool requiring an understanding of derivatives, but it allows extracting profit from volatility without guessing where the price will move.
In bear market conditions, a cash reserve is sometimes more important than any yield: it is free funds that allow you to enter a position profitably when a fundamentally strong asset suddenly becomes unjustifiably cheap.
But no strategy — passive or active — saves you from the investor's main adversary. And it should be sought not on exchange charts.
The Enemy in the Mirror
Losses more often occur not from a wrong forecast, but from an incorrect reaction to losses. Panic selling at a local low, attempts to "get revenge" on the market after losses, chasing a bounce