When fear surplaces greed: After the crash cryptocurrency might face a long bear market, marked by pessimism, falling prices - and real evolution. In this article you find some tips and ideas about the upcoming bear market, based on analyses of prior Bitcoin bear markets.

Prices of crypto are sinking, falling, crashing. Not just today, but for a month, and not just for certain currencies, but for all. This makes it likely that the bubble peaked at $20,000 for one Bitcoin or in $800billion for all coins. Likely 2018 will be a depressing year in the sign of the bear. The price will try to find a bottom, wherever it is.

Sure, it is possible, that the current crashes are just a correction of the excessive chapters of the bull market, which swelled the giant bubble of late 2017. However, the crashes come too frequent and too strong, to bet your money on this theory.

Here we assume that a bear market will dominate the crypto markets. Hence, we give some tips what to do and present some ideas about bear markets in crypto, based on the history of former Bitcoin bear markets.

History doesn’t repeat itself - but it rhymes

Sure, you can’t read the future from the past. No matter how often somethings happens in a certain way - next time it can always happen in a completely different manner. However, you can assume that history says at least something about how the bear market could play out.

In the past, Bitcoin has build up two major bubbles. After they burst, a long bear market followed (we ignore the smaller bubbles of 2010 and 2013 for simplicity). Each of these big bubbles marked the peak of a reward era. For those of you who don’t know - reward era is the term in Bitcoin-speak for those episodes of about four years in which miners get a certain amount of Bitcoins for blocks. This amounts halfs at the end of each era. In the first era miners got 50 Bitcoins, in the second 25, and in the third, in which we currently are, 12.5.

One of the most fascinating aspects of Bitcoin is that each of these reward eras had its own sequence of bubble, crash and bear market. It is like there is a law behind.

Imgae: The bubble of 2011 in a 2-year-chart. All charts from Bitcoincharts.com

The huge bubble of the first era peaked in June 2011 at around $30. Compared to the beginning of that year, Bitcoin increased its value by nearly a factor of hundred. After the bubble had bursted, a sharp degression followed, and several month later, in November 2011, the price reached its lowest point with $2. From here on it climbed up again, but only slowly, and it was not before spring 2013, when the bull market came back.

Image: The bubble of 2013/14 in a 2.5 year perspective.

During the wild year of 2013 the price of Bitcoin rose from something like $10 to more than $1000. Again, it increased by a factor of 100. After the bubble popped in December 2013, the price declined for a long period. More than one year later, in January 2015, it fall on a bottom of about $200. From here a slow growth succeeded, but only in November this year the climb became significant.

Image: The bubble of late 2017. You can complete the line to find out what the future will bring.

The large bubble of 2017 lifted the Bitcoin price from something like $500 to nearly $20,000. after its burst, the price fell below $8,000. How will it play out? Nobody knows for sure, but the charts of the old bubbles tell a certain story.