BTC Rebound Sparks Debate Over Bear Market Cycle Status

Bitcoin's recovery from its July low has been significant, but it doesn't necessarily mean the bear market cycle is over. The cryptocurrency gained nearly 33% in a short period, surpassing two consecutive months of gains in July and August.

The current rebound is still around 40% below Bitcoin's all-time high, leaving traders wondering if this is the start of a new bullish phase or just another recovery within a broader bear-market cycle. To assess this, experts have examined various factors, including market structure, institutional demand, macroeconomic backdrop, and on-chain indicators.

Looking at the duration of the bear market, each bearish cycle is defined as any period where BTC trades under its 200-day Simple Moving Average (SMA) for 30 or more consecutive days. The current cycle has lasted roughly 290 days, making it the fourth-longest bear cycle since 2014.

Historically, drawdowns in Bitcoin have been significant during major bear-market cycles, but the current correction is relatively moderate. For example, the ICO bubble saw an 83.60% correction in 2018-2019, while earlier corrective phases recorded drawdowns over 74%. In contrast, the current decline is more like mid-cycle corrections seen in 2021, which recorded a 52.90% fall.

Experts attribute the moderate drawdown to Bitcoin's evolution from a speculative asset class to an institutionally participated one. The launch of US spot Bitcoin Exchange Traded Funds (ETFs) in January 2024 further accelerated this integration by providing regulated access to BTC for investors and institutions.