On average, cryptocurrency bear markets last approximately one year, occasionally extending to two. These phases occur when supply exceeds demand, leading to prolonged price declines.
One of the most severe bear markets occurred in 2022, when FTX—a top crypto exchange by trading volume—collapsed due to a bank run. This triggered a domino effect, causing hedge funds and lending protocols to fail, marking a historic low for the industry.
Understanding Bear Market Psychology
Recent discussions suggest the crypto market might re-enter a bear phase. Many cryptocurrencies have struggled since Bitcoin (BTC) peaked at $73,750 in March. The subsequent decline has fueled concerns of another prolonged downturn.
Surprisingly, this drop happened before the Bitcoin halving, contradicting predictions of higher prices. Instead, BTC and other cryptocurrencies have since consolidated, declined, or experienced false breakouts.
To assess whether a bear market is approaching, let's examine the market cycle psychology chart, which outlines 14 distinct stages—from "disbelief" (transitioning out of a bear market) to "euphoria" and "complacency" (preceding a downturn).
Key observations:
- Disbelief phase: Likely occurred in Q1 2023 as BTC began sustained gains.
- Thrill phase: Coincided with January 2024's ETF approval, prompting bullish BTC sentiment.
- Euphoria phase: Peaked in March as BTC and altcoins surged.
- Current trends suggest the market is between complacency and anxiety—often a precursor to a bear market.
👉 Explore crypto market cycles in depth
Bitcoin Holders Resist Sell-Off Despite ETH Weakness
Glassnode's Long-Term Holder Sell-side Risk Ratio—measuring profit-taking against historical cycles—shows current levels remain below 2021's bull market peak. This indicates long-term BTC holders are holding firm, signaling strong conviction.
"A significant portion of Bitcoin wealth is held by long-term investors, suggesting patience for higher prices," Glassnode notes.
This resilience hints that a bear market may not be imminent. However, skepticism persists due to Ethereum (ETH)'s underperformance. Unlike 2021—when ETH swiftly followed BTC to new highs—ETH now trades 45% below its all-time high ($2,657), despite spot ETF approvals.
Key Risks: Whales and Profit Metrics
- Whale Activity: Reports suggest crypto whales have slowed BTC purchases—a common bull market pause, but worth monitoring.
Net Unrealized Profit/Loss (NUPL): A critical indicator:
- Current BTC NUPL: 0.46 (similar to July's levels preceding a drop to $55,857).
- If NUPL falls below 0.40, analysts warn BTC could retreat to $40,000.
"Bears may seize control if NUPL declines further," warns CryptoQuant analyst Grizzly.
👉 Learn how to navigate market volatility
FAQ Section
Q: How long do crypto bear markets typically last?
A: Usually 1–2 years, though cycles vary based on macroeconomic factors and investor sentiment.
Q: What signs suggest a bear market is approaching?
A: Key indicators include declining NUPL, reduced whale activity, and prolonged price consolidation.
Q: Why is ETH underperforming despite ETF approvals?
A: Possible reasons include weaker institutional demand vs. BTC or broader altcoin market fatigue.
Disclaimer: This analysis is informational only. Cryptocurrency markets are volatile—conduct independent research before investing.
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