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The recovery of bitcoin and other cryptocurrencies at the start of the year fueled hopes that the bear market had finally ended. However, the market has since reversed course and assets in the space are losing a good chunk of their Q1 gains. With the current trend, it is more than likely that the bear market is not over.
Historical bitcoin trends suggest otherwise
In the past four bull runs that bitcoin has seen since its inception, several things have come to the fore. The first is that the bear market after the bull market does not end until the year of the halving.
The bitcoin halving is an important event because it halves the BTC block reward, reducing the number of new BTC released into circulation. This is a bullish event and has always heralded the start of a bull market for the cryptocurrency.
Currently, the market is still about a year away from the next bitcoin halving, which is expected to take place in 2024, and if historical trends are anything to go by, the bear market is likely to last until 2023 and early next year before the first halving. Bull run is being seen.
Following past trends, there could be more pain yet to come for BTC. If it were to lose around 85% of its all-time high value, as it did before the last bull run, the market bottom is still unlikely to be reached.
Each bull market began with a halving event | Source: BTCUSD on TradingView.com
Investor sentiment remains low
After the euphoria at the pump died down in the first half of 2023, investors were at a loss when it came to pitching their tents. As a result, investor sentiment has come to a standstill. The Crypto Fear and Greed Index Now Sits at Neutral 52,
This means that investors are not in a rush to buy more bitcoin at the moment, so the bear market persists as sellers continue to dominate. A move back into the greed zone will push the price up again, but it is unlikely that buyers are waiting for BTC to revisit $20,000 before getting back in the game.
For now, BTC remains below $27,000, a support level that the bears have successfully flipped into resistance. However, it is still trading above its 100-day moving average, which indicates a bullish trend in the near term, albeit short-lived.
