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Concept

Bear Market

In Elliott Wave terms, a bear market is the corrective phase that follows a completed five-wave advance at a large degree. The entire decline unfolds as a three-wave structure labeled A-B-C. Wave A breaks the uptrend and catches most participants off guard. Wave B rallies and tricks people into thinking the bull is back. Wave C finishes the job, usually driving prices below the Wave A low and flushing out the last holdouts. Bear markets tend to move faster than bull markets because fear is a stronger motivator than greed. The internal structure can take various corrective forms: zigzags produce the sharpest declines, flats grind sideways before the C wave drop, and triangles can delay the final leg. Understanding that the entire decline is one corrective structure at the larger degree helps you avoid calling bottoms too early during Wave A or getting trapped long during the Wave B rally.

EXAMPLE

After a five-wave bull market in Bitcoin from $3,200 to $69,000, the bear market unfolds as an A-B-C correction. Wave A drops to $33,000, Wave B rallies to $48,000 giving false hope, and Wave C completes near $15,500. The entire move from $69,000 to $15,500 is one corrective wave at the cycle degree.

RELATED TERMS

Corrective Wave
A corrective wave moves against the direction of the trend at the next larger de...
Wave A
Wave A is the first move in a corrective sequence labeled A-B-C. It establishes ...
Wave B
Wave B is the second wave of a corrective sequence. It moves against the correct...
Wave C
Wave C is the final wave of a corrective A-B-C sequence. It always subdivides in...
AlternationAll TermsBull Market
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