Bear Hug

A "bear hug" in the context of cryptocurrency refers to a situation where an investor or a group of investors deliberately drive down the price of a particular cryptocurrency through coordinated selling or short-selling. This aggressive selling pressure aims to create panic among other investors, causing them to sell off their holdings as well, thereby further driving down the price.

Example: In a bear hug scenario, a group of large investors may coordinate to sell off a significant portion of their holdings in a specific cryptocurrency all at once. This sudden influx of selling pressure causes the price to plummet rapidly, triggering stop-loss orders and panic selling among retail investors. As the price continues to drop, more investors are forced to sell, exacerbating the downward spiral.

Case: In 2021, there were allegations of bear hug tactics being employed in the cryptocurrency market, particularly during periods of high volatility. Some investors and analysts pointed to coordinated sell-offs by large whales as a possible explanation for sharp and sudden price declines in certain cryptocurrencies. These instances highlighted the potential for market manipulation and the importance of regulatory oversight in the crypto space.