Bear Market

A bear market is a prolonged period of declining prices in a financial market, typically defined as a drop of 20% or more from recent highs. In forex trading, bear market conditions often reflect a sustained downtrend in a currency pair driven by weak economic data, falling interest rates, or negative sentiment. Traders who anticipate bearish conditions may open short positions to profit from falling prices. Identifying a bear market early can help traders align their strategies with the dominant trend rather than trading against it.