Author: TVBee
3-4 Stages of a Bear Market
Stage 1: Reaction Phase (Faith Still Intact)
⬩ Approximately December 16, 2017 – October 8, 2018
⬩ Approximately November 7, 2021 – May 12, 2022
⬩ Suspected October 6, 2025 – January 6, 2026
In this stage, BTC is declining, but USDT market cap is rising.
Funds flowing out of crypto are still accumulating in USDT. Some people are likely holding onto hope for the market. This is the market’s reaction to the bear phase, a stage where faith remains.
The suspected period from October 6, 2025, to January 6, 2026, appears to complete this stage.
Stage 2: Confirmation Phase (Faith Collapsing)
⬩ Approximately October 8, 2018 – November 14, 2018
⬩ Approximately May 12, 2022 – August 4, 2022
⬩ Suspected January 6, 2026 – ?
In this stage, BTC may be either declining or sideways, but USDT market cap is decreasing.
Funds are flowing out of crypto, confirming the market is in a bear phase. Capital is mainly leaving, and faith is collapsing.
In 2018, there were no major negative events, so BTC mainly oscillated. In 2022, Luna and Three Arrows Capital’s collapse caused BTC to decline further.
The suspected start of this stage is January 6, 2026, when USDT market cap begins to decrease, and the market starts questioning BTC’s status as digital gold, with doubts about its value dropping to below 3000…
However, there are no signs that Stage 2 has ended yet.
Stage 3: Accumulation Phase (Faith Settling)
⬩ Approximately November 14, 2018 – December 15, 2018
⬩ Approximately August 4, 2022 – November 9, 2022
In this stage, BTC may be declining or sideways, but USDT market cap is increasing.
In 2018, since the previous phase was oscillation, this phase was a decline. In 2022, after a decline, the market entered consolidation, so this phase involved some decline followed by sideways movement.
It could also mean that funds selling BTC are no longer mainly leaving the market but are instead entering or accumulating, causing USDT market cap to grow. The weakest believers have exited, while steadfast believers are holding USDT or adding funds, and market faith is entering a settling phase.
Stage 4: Final Panic (Black Swan)
⬩ Approximately November 9, 2022 – November 22, 2022
In this phase, BTC is declining, and USDT market cap is also decreasing.
This is the final panic stage, mainly driven by black swan events. There was no such stage in 2018.
Recovery
After BTC hits bottom, it may gradually rise or oscillate at the bottom. But USDT market cap is increasing, indicating a phase of market recovery and faith rebuilding.
When to Buy the Dip
The earliest opportunity is likely during Stage 3, when USDT market cap is rising, and to buy in parts during this phase.
The optimal buying window—when BTC crashes and USDT market cap declines—is uncertain; there was no such phase in 2018.
For retail investors, a more ideal buying window might be during the recovery phase, when USDT market cap continues to grow, and BTC shows signs of bottoming out or stabilizing, even moving upward.
Final Thoughts
Comparing past cycles, the duration of Stage 1 has become shorter each time, as market reactions to bear markets are getting faster.
However, Stage 2 has not become shorter. It may be influenced by negative events. In early 2018, there were no major negative shocks, even with the launch of EOS and TRON mainnet. But after Luna’s collapse and Three Arrows’ bankruptcy in 2022, Stage 2 lengthened and declines deepened.
Currently, we are likely in Stage 2, with USDT market cap decreasing. The current negative factor is the Iran conflict, but when this will end remains uncertain.
Price-wise, BeeBrother believes the conflict’s impact on liquidity is weak, but US stocks need a correction, so the current phase might be between 2018 and 2022’s Stage 2, possibly a downward oscillation. However, this is a tentative guess, as uncertainties with Trump and Iran are significant.
In terms of cycle, BeeBrother suspects that before and after Trump’s visit to China, geopolitical negatives may end, as Trump’s visit indicates he has bargaining chips with Iran and other countries.
But whether a black swan will occur during negotiations remains unknown. Plus, upcoming events like Wosh’s appointment and Japan’s interest rate hikes could influence the situation.
Therefore, the end of Stage 2 still requires observation. The first buying opportunity will come after USDT market cap declines and begins to recover, so patience is needed. Since USDT is now used for more than just crypto trading, its market cap changes may be less obvious this cycle. It’s also necessary to consider geopolitical and monetary policy factors.
