In trading and investing, the term bearish refers to a pessimistic view of a market, asset, or financial instrument. A bearish trader anticipates a downward price movement and often takes short positions to profit from the decline.

The word “bearish” is derived from the way bears attack — swiping their paws downward — which symbolizes falling prices. This analogy is widely used in both traditional and crypto markets to describe negative trends or sentiment.

Bearish sentiment can be applied across timeframes:

• Short-term bearishness:
  Expecting a price drop within hours or days

• Long-term bearishness:
  Anticipating prolonged declines over weeks, months, or more

Traders use technical indicators, fundamental analysis, and macroeconomic data to identify bearish setups. Common signs of a bearish market include lower highs and lower lows, negative earnings reports, economic downturns, and bearish candlestick patterns like the bearish engulfing.

In bearish environments, risk management becomes crucial, as prices can decline rapidly and trigger margin calls or significant losses.