How to prepare for the next crypto bear market, spot its start and end, and protect your investments amid uncertainty
The crypto market’s next bear cycle could arrive as early as 2026, potentially accelerated by recent geopolitical events and market shocks. This guide breaks down how to identify the bear market’s beginning, manage through it, and position yourself for the long recovery ahead. You’ll learn why minimizing leverage is critical, what price drops to expect, and how Bitcoin and altcoins tend to behave differently. Whether you’re a seasoned investor or just getting started, mastering bear market strategy is key to surviving and thriving.
Understanding the Crypto Market Cycle and Bear Market Timing
Crypto historically moves in roughly 4-year cycles. The fourth year typically brings explosive bull runs and all-time highs for Bitcoin and most altcoins. Assuming this pattern holds, we are currently in the final bullish year. That means a bear market, defined by steep downturns and cycle lows, usually follows the bull run’s peak about a year later.
Bitcoin's price trends support this— after a cycle high, it often falls 70–80% to a bottom within 12 months. Altcoins, usually more volatile, can drop 90–99%+. The bear market typically begins with a significant deleveraging event — where over-leveraged crypto firms or projects collapse, triggering forced sell-offs and cascading liquidations. For example, the 2021 collapse of FTX caused a sharp market flush, followed by Bitcoin’s bottom a few weeks later.
This upcoming bear market could be different in its catalyst, possibly involving a failing Bitcoin treasury company or other crypto institution. But the overall pattern of forced liquidations leading to steep losses remains a reliable signal.
How Will You Know When the Bear Market Has Begun?
Signals to watch for:
- Major liquidation events: Collapses of companies loaded with crypto debt spark forced sales.
- Heavy market volatility and rapid price drops: When Bitcoin and altcoins fall sharply in quick succession.
- Economic headwinds: Bad news from global trade or financial markets impacting investor confidence.
- Loss of retail and institutional buying interest: Buyers wait while sellers dominate.
When these line up, expect a bear market phase to be underway, often starting months before the actual price bottom.
Critical Preparations to Survive the Bear Market
1. Cut Leverage Immediately
Leverage means borrowing money or crypto to increase exposure. While it can amplify gains when markets rise, it’s deadly in a downturn. Rising liquidations wipe out positions fast, often leaving borrowers with large debts or zero holdings.
Investor takeaway: Reduce or eliminate all crypto and fiat debt now. Sell collateralized loans or close margin positions. Have cash reserve on hand to avoid forced sales during market dips.
2. Set Realistic Expectations for Price Drops and Recovery Time
Expect Bitcoin to drop as much as 70–80% from peak to trough. Altcoins often fall 90–99% or more. Institutional adoption and ETFs have not historically prevented deep bear markets, as selling pressure dominates.
Recovery can take years, especially for altcoins. Bitcoin usually recovers first, followed by major large-cap altcoins. Smaller altcoins recover last, often taking multiple years to regain previous highs.
3. Have Cash Ready to Accumulate at Market Lows
Bear markets present prime opportunities to buy quality assets at deep discounts. But this requires cash beyond your invested crypto. Save enough cash now to accumulate BTC or strong altcoins during the market bottom.
What Could Go Wrong? Risks to Consider
- Unexpected Catalysts: The trigger for the bear market may be unpredictable, worsening losses suddenly.
- Economic Downturn: Broader economic issues could deepen bear conditions and reduce buying power overall.
- Overconfidence: Betting on a quick recovery or disregarding leverage risks can lead to ruin.
- Regulatory crackdowns: Government intervention could exacerbate sell-offs or restrict access to exchanges.
Data Callout: Historical Price Drops
Bitcoin’s bear market lows average a 75% decline from cycle highs. For example:
| Cycle Peak Price | Approximate Bottom Price | % Decline |
|---|---|---|
| $20,000 (2017) | ~$3,200 (2018) | ~84% |
| $64,000 (2021) | ~$29,000 (2022) | ~55% |
Altcoins tend to double or triple these declines.
Answer Box: When Does a Crypto Bear Market Usually Start and End?
A crypto bear market typically starts within months after the Bitcoin cycle peak, triggered by a major deleveraging event like the collapse of a leveraged crypto firm. It often lasts 1–3 years, with Bitcoin bottoming first, followed by altcoins months or years later. Recovery speed depends on market conditions, investor confidence, and macroeconomic factors.
Summary: How to Prepare for the Next Crypto Bear Market
- Reduce or eliminate all leverage now to avoid cascaded liquidations.
- Expect Bitcoin to drop 70–80% and altcoins even more — set realistic price targets.
- Build a cash reserve to buy quality crypto assets at market lows.
- Watch for major sell-offs and economic signs signaling the bear market’s start.
- Understand bear markets typically last years; patience and discipline pay off.
Why Wolfy Wealth PRO Helps You Stay Ahead
Navigating bear markets requires more than theory. Wolfy Wealth PRO delivers timely analysis, risk management rules, and model portfolios designed for volatility and downturns. Our alerts help you spot deleveraging events early and optimize accumulation strategies during the toughest phases. Get the full playbook and entries in today’s Wolfy Wealth PRO brief.
FAQ
Q: How long do crypto bear markets last?
A: Bear markets typically last 1 to 3 years from cycle peak to recovery, with Bitcoin bottoming first and altcoins taking longer.
Q: Can Bitcoin ETFs prevent deep bear markets?
A: No. Most Bitcoin ETF holders are retail investors, and institutional buying does not counter forced liquidations that trigger bear markets.
Q: What causes the biggest price drops in bear markets?
A: Major deleveraging events, like crypto firms collapsing with large debts, often unleash forced asset sales causing sharp price declines.
Q: Should I sell all my crypto before the bear market?
A: Not necessarily. Avoid using leverage and save cash to buy dips. Selling all crypto prematurely misses accumulation opportunities at steep discounts.
Q: Will this bear market be different than previous ones?
A: It may have a different catalyst, but leverage-driven liquidations and long recoveries are likely to remain consistent.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Crypto investments carry risks due to volatility and market shifts. Always do your own research and consider consulting a financial advisor.
By Wolfy Wealth - Empowering crypto investors since 2016
Subscribe to Wolfy Wealth PRO
Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
