Bitcoin's Brutal Bear Markets Show Signs of Abating
Wintermute has observed a significant shift in Bitcoin's market behavior, indicating that the cryptocurrency may be maturing compared to earlier cycles. According to the trading firm, Bitcoin is spending less time near extreme capitulation levels, which suggests a more stable and less brutal market.
The current bear market appears to be less severe than previous ones, with Bitcoin down around 50% from its peak 340 days after the top. This is in stark contrast to earlier cycles, where losses exceeded 75% at the same stage in 2018 and 2022.
Wintermute attributes this change to earlier participation from exchange-traded funds (ETFs) and institutional investors, as well as improving market breadth. The firm notes that profits from one group of investors are moving into another, which resembles the early stages of a new cycle.
The view is being tested by current price action, with Bitcoin showing resilience in the face of strong US jobs reports and other macroeconomic factors.