Crypto markets are currently in the longest bear cycle ever, nearing 500 days, and things are looking positive fundamentally, but the markets have yet to react. On August 28th, MichaÃ«l van de Poppe, the CEO and founder of MN Trading, stated that the current bear market is relatively comparable to what we witnessed in 2015.
“Despite solid fundamental growth,” he also added that belief in crypto is slowly fading, and it is essentially a period of sideways movement.
Bitcoin price is currently down by about 62% compared to the previous peak seen about two years ago. Therefore, the bear market lasted much longer than the previous cycle lows for 490 days. There are several possible reasons for the prolonged crypto winter in this cycle. An unprecedented pandemic ravaged the world, forcing governments to lock down and causing damage to economies and livelihoods.
Furthermore, several high-profile crypto crashes in 2022, such as the collapse of companies like Terra and FTX, created a strong reaction from regulators willing to undermine the industry. Rising interest rates also affected the battered economies of the world and provided lower-risk returns for investors, but also contributed to a debt avalanche.
However, it’s not all doom and gloom. The world’s largest asset manager, BlackRock, demonstrated its interest in Bitcoin and crypto by holding shares in major mining companies and applying for a spot ETF. Analysts expect the approval of such a product this year, which would mean significant institutional investment. There are also other fundamental factors, such as the shift towards crypto in Hong Kong and Asia and the halving of Bitcoin. The analyst added:
“The issue is that these events are not reflected in the price during the current period. The market is lagging behind because the price has been falling for the past 2 years, stuck in a ‘bear market mode’.”
Meanwhile, the price of Bitcoin remained mostly stagnant over the weekend and stayed at $26,000. At the time of writing, the asset is trading at $25,982, experiencing a 0.66% decrease. Bitcoin found a new support zone for consolidation since the 10% drop on August 17th, but volatility and volumes are decreasing again, so things may stay this way for a while.