{"id":11944,"date":"2022-01-15T20:00:00","date_gmt":"2022-01-15T20:00:00","guid":{"rendered":"http:\/\/ci02975c80100025ef"},"modified":"2025-10-01T13:17:44","modified_gmt":"2025-10-01T18:17:44","slug":"bitcoin-bear-markets-what-why-when","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/markets\/bitcoin-bear-markets-what-why-when","title":{"rendered":"Bitcoin Bear Markets: What, Why, When?"},"content":{"rendered":"
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Bitcoin has had its fair share of bear markets in the past. Let\u2019s briefly recap the most significant ones and see what we can learn from them.<\/p>\n

The 2011-2012 Bear Market<\/h3>\n

The bitcoin price fell from $29 on June 8, 2011 to $2.10 on November 18, 2011, followed by months of sideways action:<\/p>\n

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The most painful bear market happened before most of us were even aware that something like bitcoin existed. More than ten years ago, the price of bitcoin reached almost $30 on the then-popular Mt. Gox exchange, only to be followed by a \u201cstairway to hell\u201d pattern that would take the price to $2.10 in a several months\u2019 time.<\/p>\n

Bitcoin dumped 93%! But consider this: buying bitcoin even at the all-time high (ATH) price of $30 would still have been a steal from today\u2019s perspective. Who wouldn\u2019t want to stack some bitcoin at $30 dollars, right? Of course few back then could anticipate that in ten years, bitcoin would sit around $50,000; that\u2019s why after that initial drop, it took more than a year for the price to recover and climb to new heights. The perception of what bitcoin actually is evolved over the decade as it went from a geeky experiment to darknet currency to an inflation hedge, and potentially the basis of the future global monetary system.<\/p>\n

When the price breached the previous ATH in early 2013, it never dipped below that price level again.<\/p>\n

The 2014-2016 Bear Market<\/h3>\n

Bitcoin\u2019s price later tumbled from $1,135 on December 4, 2013 to $175 on January 14, 2015, followed by months of sideways action:<\/p>\n

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At the turn of 2013\/2014, two major things happened: the Silk Road marketplace was shut down (Ross Ulbricht<\/a> is now serving a double life sentence without the possibility of parole), and the Mt. Gox exchange collapsed. These were the two most likely causes of the subsequent bear market. With two major bitcoin venues shut down and major losses sustained by their users, it seemed to some like bitcoin was dead and useless.<\/p>\n

As bitcoin dropped 85% from the top to bottom, many \u201cbitcoin obituaries<\/a>\u201d were written, usually with smug told-you-so undertones.<\/p>\n

But those that were there during the 2011-2012 period learned their lesson: Bitcoin comes back – with vengeance! Builders kept on building, and some of the most pivotal tech was created during the second bear market: Trezor One<\/a>, the world\u2019s first hardware wallet, was released in early 2014, and the Lightning Network whitepaper<\/a> was published in January 2016.<\/p>\n

And when the price finally breached the previous ATH in early 2017, it never dipped below $1000 ever again.<\/p>\n

The 2018-2020 Bear Market<\/h3>\n

One of the most famous \u201ccrashes\u201d of Bitcoin\u2019s career was a price fall from $19,640 on December 16, 2017 to $3,185 on December 15, 2018, followed, again, by months of sideways action:<\/p>\n

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The most recent bear market is sometimes dubbed \u201cthe crypto-winter,\u201d mostly because the major shakeout and a drop to the low near $3,000 came in the winter of 2018\/2019. This bear market was quite tough because of the fake rally of spring\/summer 2019 when the price reached $12,000, only to drop back to $4,000 when the COVID-19 panic struck in full force in March 2020.<\/p>\n

But again, bitcoin recovered with vengeance and may never return below its previous ATH of $20k again. Many indispensable ecosystem projects took off during this period – Trezor Model T<\/a> and the Shamir Backup<\/a>, BTCPay Server<\/a>, most Lightning Network wallets and tooling, Jack Dorsey\u2019s Spiral<\/a>, Jack Mallers\u2019 Strike<\/a>, and many other tools and services we use today.<\/p>\n

Can We Spot A Bear Coming For Us?<\/h3>\n

Per traditional definition<\/a>, a bear market occurs when \u201cprices fall 20% or more from recent highs, amid widespread pessimism and negative investor sentiment.\u201d While the first part of this definition is easy to quantify \u2014 yes, bitcoin has dropped by that much from recent highs \u2014 the latter is very subjective.<\/p>\n

A whole industry of on-chain metrics trying to determine the prevailing sentiment has been built over the years. But the problem with such metrics is that they themselves are built on subjective interpretations of what\u2019s going on:<\/p>\n

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Bitcoin balances on exchanges ended 2021 higher at 1.56M BTC according to @coinmetrics<\/a>, but they ended the year lower at 2.55M BTC according to @glassnode<\/a>. \ud83e\udd37\u200d\u2642\ufe0f pic.twitter.com\/kLs24CZKG6<\/a><\/p>\n

— Jameson Lopp (@lopp) January 3, 2022<\/a><\/p><\/blockquote>\n