The Bear Market Scenario: What Scene is Your "Faith" Going Through?

Author: TVBee

The 3-4 stages of a bear market

Phase 1 of a bear market: The reaction phase (faith remains).

Approximately December 16, 2017 to October 8, 2018

Approximately November 7, 2021 to May 12, 2022

⬩Possibly between October 6, 2025 and January 6, 2026

During this period, BTC was falling, but USDT's market capitalization was rising.

Funds flowing out of crypto are still accumulating in some USDT, and some people should still have illusions about the market. This is a stage where the market is reacting to the bear market, and it is a stage where faith still exists.

It appears that this phase was completed between October 6, 2025 and January 6, 2026.

Phase Two of the Bear Market: Confirmation Phase (Collapse of Faith)

⬩Approximately October 8, 2018 to November 14, 2018

Approximately May 12, 2022 to August 4, 2022

⬩Possibly January 6, 2026?

During this phase, BTC may be falling or trading sideways, but the market capitalization of USDT is decreasing.

Funds flowing out of cryptocurrencies, particularly USDT, confirm a bear market, with funds primarily exiting the market, marking a period of collapsing confidence.

There were no major negative factors in 2018, so BTC mainly fluctuated. However, in 2022, with Luna and the Three Arrows, BTC mainly declined.

It appears that this phase began around January 6, 2026, with USDT's market capitalization starting to decrease and various doubts arising about BTC, questioning its status as digital gold and suggesting that BTC would fall to a level starting with 3...

However, there is no sign that Phase 2 is ending.

Phase 3 of the bear market: The accumulation phase (the consolidation of faith)

Approximately November 14, 2018 to December 15, 2018

Approximately August 4, 2022 to November 9, 2022

During this phase, BTC may be falling or moving sideways, but the market capitalization of USDT is increasing.

In 2018, the previous period was characterized by fluctuations, so this period was characterized by declines. In 2022, the previous period was mainly characterized by declines, so this period will first see a decline followed by fluctuations.

This could mean that funds from selling BTC are no longer primarily exiting the market, or that funds are entering the market, increasing the market capitalization of USDT. The weakest believers have already left, while staunch believers are starting to hold USDT or deposit funds to build momentum, and market sentiment is entering a period of consolidation.

The fourth stage of the bear market: the final panic (black swan event).

⬩Approximately November 9, 2022 to November 22, 2022

During this period, BTC was falling, and the market capitalization of USDT was also decreasing.

This is the final panic phase, mainly due to the impact of black swan events. This phase did not occur in 2018.

recovery

After BTC bottoms out, it may gradually rise, or it may fluctuate at the bottom. However, the market capitalization of USDT is increasing, which is a phase of market recovery and faith rebuilding.

When to buy at the bottom

The earliest it should have been during stage ③, which was the stage when USDT's market value was rising, was to use a portion of the position to buy at the bottom in batches.

The optimal buying opportunity, which is the period of BTC crash and USDT market value decline, may not necessarily occur; this period did not exist in 2018.

For retail investors, the more ideal time to buy the dip might be the right side, which is the recovery phase. This phase is characterized by the continuous growth of USDT's market capitalization, and BTC has bottomed out and shows signs of stabilization or even upward movement.

In conclusion

The comparison shows that the first phase of each round is getting shorter and shorter, because the market is reacting to the bear market more and more quickly.

However, Phase ② did not become shorter. Phase ② may be related to the impact of negative events. There were no negative events in the first half of 2018; in fact, there were the launches of the EOS and Tron mainnets. However, the collapse of Luna and the subsequent bankruptcy of Three Arrows in 2022 made this Phase ② longer and the decline more severe.

We have most likely entered phase 2. The market value of USDT is decreasing, and the current negative factor is the war with Iran. It is uncertain when this negative factor will end.

Regarding prices, the author believes the conflict will have a relatively weak impact on liquidity, but US stocks have a need for a correction. Therefore, the current situation may be somewhere between the second phase of 2018 and 2022, potentially experiencing downward fluctuations. Of course, this prediction is not very certain, as there is considerable uncertainty surrounding Trump and Iran.

In terms of the cycle, my prediction is that the negative geopolitical factors may end around the time of Trump's visit to China. This is because Trump's visit to China means that he has sufficient bargaining power in negotiations with countries like Iran.

However, it remains to be seen whether a black swan event will occur during the communication and coordination process between the two sides. Moreover, there are still key events to come, such as Walsh's inauguration and Japan's interest rate hike.

Therefore, it remains to be seen when Phase 2 will end. The first opportunity to buy at the bottom requires patience; we need to wait for the USDT market capitalization to recover after the decline. Since USDT is now used for more than just cryptocurrency transactions, the changes in USDT market capitalization in this round may not be significant. Therefore, factors such as geopolitics and monetary policy must also be considered.