Bitcoin is experiencing, in my observation, the "mildest" bear phase in its history. The first cryptocurrency has lost about half its value from the peak of early October 2025, whereas in previous downturns the rate collapsed by 77–84%. However, market sentiment remains consistently gloomy: the Fear and Greed Index has barely left the fear zone for almost all of 2026, and at times plunges into extreme fear for record-long periods. This is despite the fact that both previous bear market lows — in 2018 and 2022 — preceded multiple increases in the rate. History clearly shows where to find opportunity, but 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 market" came from and what it looks like now
In the classic sense, a bear market is a price decline of 20% or more from a previous peak over an extended period. From a technical analysis perspective, it is characterized by a series of successively lower highs and lows. For cryptocurrencies, the cyclicality is doubly amplified: if a 20% decline is considered bearish for the stock market, Bitcoin typically loses significantly more. According to my calculations, 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 rate crashed from $67,617 to $15,742 — a 76.7% drop.
Against this backdrop, the current decline is the most forgiving in the asset's history: minus 51% compared to previous drops of over 70%. However, in terms of duration, the current bear phase is already among the most prolonged. 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. The thinned order book reacts more sharply to each large trade, swinging the price pendulum more violently.
Discount or trap: how not to make a mistake with the entry point
At the bottom of a bear market, entry points emerge that seem unimaginably attractive at the peak of euphoria. For example, from the December 2018 low of around $3,200, Bitcoin grew more than 20-fold by November 2021 — to $69,000. The next drop to $15,500 in November 2022 turned into levels around $126,000 by October 2025 — almost 700% above the bottom. But to catch the bottom, you first need to wait for it. Each past bear market consumed no less than 77% of the value, whereas current levels are only about 50% below the October peak. If the market repeats even the mildest scenario, the price could fall to approximately $29,000 — half of current levels.
Instead of trying to guess the turning point, I recommend regularly buying the asset in small portions — the dollar-cost averaging (DCA) strategy. It eliminates the need to catch the bottom and "falling knives": equal amounts invested at regular intervals yield, on average, a more favorable entry price. However, this strategy has limitations: it does not protect against a general downward trend, and you should only invest free funds that won't be needed in the near future.
Betting against the market: shorting, options, and inverse products
The most direct way to turn a decline into profit is short selling, or shorting. A trader borrows an asset from the exchange, sells it at the current price, and when the rate falls, buys it back cheaper, keeping the difference. The main drawback is the asymmetry of risk: when buying, the maximum loss is limited to the amount invested, but when shorting, potential losses are theoretically unlimited. Therefore, position size and a pre-determined 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 valuable; if it rises, only the paid premium is lost. Inverse products behave similarly. In both cases, you can only lose what you invested — no more.
Saw instead of trend: how to trade in a sideways market
In the midst of a bear phase, long stretches of sluggish price decline are interrupted by brief "dead cat bounces." They spark hope but almost always fizzle out, leaving the buyer "underwater" at a local peak. It is on this trap that most beginners get caught. While the trend lingers in a horizontal corridor, many trade the range: buying at the lower boundary, selling at the upper. Another response to the choppy rhythm is scalping and intraday trading: quick trades on local fluctuations without the risk of leaving a position overnight.
All these techniques share a common enemy — emotions. A sudden bounce ignites excitement and the urge to recoup losses, and yesterday's discipline crumbles. Add to this low liquidity with wide spreads — the cost of a mistake on a bear market is significantly higher.
Earn while you wait: passive strategies
While the market searches for a bottom, capital doesn't have to sit idle. Ethereum staking yields about 2.8% annually — less than a couple of years ago, due to the increase in locked coins. For those who want to weather the storm in a safe haven, stablecoin yields are suitable: capital remains in dollar equivalent and earns 5–10% per annum. However, during a downturn, such rates usually decline, and high yields may hide depeg risks. A more active approach is farming in DeFi protocols, but this carries higher impermanent loss and smart contract vulnerability risks.
Delta-neutral structures stand apart: earning from the difference in funding rates without predicting price direction. The tool is complex, but it allows you to extract profit from volatility without guessing where the rate will move.
Bottom signals: how to recognize a reversal
The end of a bear market is only visible on the chart in hindsight, but recognizing a full reversal in the moment is not easy. One technical criterion is a 20% rise from the low with a hold above a support level. The first marker is capitulation: a wave of forced and panic selling that "cleanses" the market of "weak hands." Its companion is extremely negative sentiment: when the Fear and Greed Index stays in the "red zone" for months, pessimism is often near its limit.
On-chain data helps make more informed decisions. The MVRV Z-score shows how far Bitcoin's quotes have deviated from the average price of the last coin movement. Currently, the indicator hovers around 0.25 — at the lower end of the scale, which historically coincided with market bottoms. The holder structure also provides clues: when "strong hands" start accumulating again, it is visible in the age of coins on the network. The realized price, around which the rate now fluctuates, has historically served as support. Past prolonged downturns lasted over a year, while the current "bear market" is about nine months old.
The enemy in the mirror: psychology and discipline
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 — all this costs more than any analytical mistake. Fortunes are made in the "bear market," and "cream is skimmed" in the bull market. This only works for those who "survive" to the reversal without giving up at the very bottom.
A bear market pays not for courage, but for cold calculation: strict adherence to a trading system and well-thought-out risk management. Each of the past downturns ended successfully. The winners were not those who guessed the bottom, but those who soberly assessed the recovery timeline and did not succumb to fear. Dollar-cost averaging, shorting, stablecoin yields, delta-neutral strategies — any of these tools empowers a disciplined trader and betrays one who relies on luck.
My professional conclusion: Indicators like the MVRV Z-score are already signaling an approaching bottom, but none of them names the exact reversal date. The next cycle, like all previous ones, will test the patience and discipline of participants. It is easier to pass this test for those who prepared in advance and did not give in to emotions, rather than for those who simply waited for it to become less scary.