Author: TVBee
3~4 Phases of a Bear Market
Phase ① of Bear Market: Reaction Phase (Faith Still Exists)
⬩ Around December 16, 2017 ~ October 08, 2018
⬩ Around November 07, 2021 ~ May 12, 2022
⬩ Suspected October 06, 2025 ~ January 06, 2026
During this phase, BTC is declining, but the market value of USDT is increasing.
Funds flowing out of crypto are still accumulating in some USDT, and some individuals should still have hope for the market, marking the phase of market reaction to the bear market, a stage where faith still exists.
It is suspected that October 06, 2025 ~ January 06, 2026 has completed this phase.
Phase ② of Bear Market: Confirmation Phase (Faith Collapses)
⬩ Around October 08, 2018 ~ November 14, 2018
⬩ Around May 12, 2022 ~ August 04, 2022
⬩ Suspected January 06, 2026 ~ ?
In this phase, BTC may be declining or moving sideways, but the market value of USDT is decreasing.
Funds flowing out of crypto are leaving USDT, and the market confirms the bear market, with funding primarily focused on exiting, representing the phase of faith collapse.
In 2018, there was no major bearish event, so BTC fluctuated, while in 2022, with the collapse of Luna and Three Arrows, BTC primarily declined.
It is suspected that January 06, 2026 marks the beginning of this phase, with the market value of USDT beginning to decrease, and various doubts about BTC arise, questioning its digital gold property, believing BTC will drop to below 30...
However, there are currently no signs that Phase ② has ended.
Phase ③ of Bear Market: Accumulation Phase (Faith Settles)
⬩ Around November 14, 2018 ~ December 15, 2018
⬩ Around August 04, 2022 ~ November 09, 2022
In this phase, BTC may be declining or moving sideways, but the market value of USDT is increasing.
In 2018, due to the previous phase being fluctuating, this phase is characterized by decline. In 2022, the previous phase primarily declined, hence this phase first saw a drop then shifted to fluctuation.
Either the funds selling BTC are no longer primarily focused on exiting, or funds are entering, causing the market value of USDT to rise. The weakest believers have already exited, while the firm believers begin to hold USDT or accumulate funds, waiting for the market's faith to settle.
Phase ④ of Bear Market: Final Panic (Black Swan)
⬩ Around November 09, 2022 ~ November 22, 2022
In this phase, BTC is declining, and the market value of USDT is also decreasing.
This is the final panic phase, mainly affected by a black swan event. This phase did not occur in 2018.
Recovery
After BTC bottoms out, it may gradually rise or move sideways. However, the market value of USDT is increasing, marking a stage of market recovery and faith reconstruction.
When to Buy the Dip
The earliest should be in Phase ③, which is the phase when the market value of USDT is rising, using partial positions to buy the dip in batches.
The best dip-buying range, during which BTC crashes and the market value of USDT declines, might not necessarily happen; this did not occur in 2018.
For retail investors, a more ideal dip-buying range may be on the right side, which is during the recovery phase, where the market value of USDT continues to grow, and BTC has touched the bottom and shows signs of stabilizing or even rising.
Final Thoughts
Comparing the phases shows that each cycle's Phase ① is getting shorter, indicating the market's faster reaction to bear markets.
However, Phase ② has not shortened. Phase ② may be related to the impact of bearish events; in the first half of 2018, there were no bearish events, and there were even launches of EOS and TRON mainnets. In 2022, after the collapse of Luna and the bankruptcy of Three Arrows, this current Phase ② became longer, with a larger decline.
Currently, we are likely already in Phase ②, as the market value of USDT is decreasing, and the current bearish sentiment is related to the Iranian conflict, the duration of which is uncertain.
In terms of price, Brother Bee believes the conflict has a weak impact on liquidity, but there is a need for a correction in the U.S. stock market, so we might currently be in a stage between 2018 and Phase ② of 2022, possibly experiencing downward fluctuations. Of course, the confidence in this speculation is not very high, as there is great uncertainty with Trump and Iran.
In terms of cycles, Brother Bee speculates that, around Trump's visit to China, the geopolitical bearish sentiment may end. Because Trump's visit would mean he has sufficient negotiating leverage regarding countries like Iran.
However, during the communication and coordination process between the two sides, whether a black swan event will occur remains unknown. Moreover, there are still significant upcoming events such as the appointment of Wash and Japan’s interest rate hike.
So when Phase ② will end is still to be observed. The first opportunity to buy the dip requires patience, waiting for the market value of USDT to recover after experiencing a decline. As USDT's current usage is not limited to crypto trading, the changes in USDT's market value this round may not be very obvious. Therefore, it should also consider factors such as geopolitical issues and monetary policies.
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