What type of market is characterized by declining prices and negative investor sentiment?

A bear market is characterized by declining prices and negative investor sentiment. In such a market, investors are generally pessimistic about future price movements, leading to widespread selling. This sentiment typically prevails when prices fall by 20% or more from recent highs, and it can create a self-reinforcing cycle as fear and uncertainty cause more investors to sell, further driving down prices.

In contrast, a bull market sees rising prices and positive sentiment among investors, while a rising market refers to a general upward trend without the widespread negativity typical of a bear market. A panic market is characterized by sudden, intense selling pressure but does not necessarily meet the criteria for a bear market. Thus, the definition and conditions surrounding a bear market align perfectly with the features indicated in the question.