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No, Bitcoin is not in its ‘longest ever bear market’ — Here’s why

August 31, 2023 Coin Telegraph

Bitcoin Price

Based on some definitions of a bear market, the current cycle is not the longest crypto winter ever seen and may not even be a bear market.

Cryptocurrencies like Bitcoin (BTC) are not in their “longest ever bear market” and probably are not even in a bear market at all, according to some industry observers.

MN Trading founder Michaël van de Poppe took to X (formerly Twitter) on Aug. 27 to claim that Bitcoin is currently in its “longest bear market” in history.

“Right now, the price of Bitcoin is nowhere near the valuation of the peak in November '21. It's down more than 50% and in a bear market of 490 days,” the trader wrote.

Van de Poppe’s statement has brought much attention from X users, amassing 1.3 million views and nearly a thousand reposts at the time of writing. Some crypto enthusiasts, however, are confident that Van de Poppe’s information is not the case.

To determine the length of the current “bear market” in crypto, it’s necessary to understand that there are different interpretations of the term.

“Thing is, the terms ‘bull’ and ‘bear market’ are entirely subjective,” Quantum Economics founder Mati Greenspan told Cointelegraph. “It can mean either the price has moved in the past or that the price is expected to move in a certain direction in the future,” Greenspan said, adding:

“The ambiguity creates endless opportunities for analysts to make pointless arguments in perpetuity.”

According to Cointelegraph’s market editor Allen Scott, one may view the current market situation as a “multi-year bear market now until a new all-time high is broken.” Such a perspective suggests that Bitcoin has been in a bear market since reaching its historic peak near $69,000 on Nov. 10, 2021, or for 659 days. The period is even longer than the one mentioned by Van de Poppe, but it’s still not the longest “bear market” based on such an approach.

As previously mentioned by Cointelegraph, Bitcoin once saw its price below its previous highs for a period of 37 months — or about 1,125 days — between November 2013 and January 2017. For over three years, Bitcoin's price failed to reclaim $1,000 after hitting the price mark in 2013.

After reaching $20,000 for the first time in December 2017, Bitcoin again lagged behind the price level until December 2020, or for 1,095 days. But does that mean that Bitcoin was in a “bear market” during this period at all? Looking at the charts, one could say that Bitcoin was actually on the trajectory of hitting its all-time peak of $68,000.

*Bitcoin price chart between late 2017 August 2023. Source: CoinGecko*

According to another bear market term interpretation, Bitcoin may not currently be in a bear market at all.

Some classic definitions suggest that a bear market happens when a market index or asset declines by 20% or more from its recent high.

According to data from CoinGecko, Bitcoin’s most recent high occurred in mid-July 2023 at around $31,400. At current prices, Bitcoin is around 13% shy of that level. Moreover, the cryptocurrency has climbed 34% over the past year.

“If you zoom out enough, Bitcoin is just one big green candle and has been in a continuous bull market since 2019. I guess those that focus on short timeframes might be experiencing a bear market,” Jan3 CEO Samson Mow told Cointelegraph.

The Bitcoin advocate also hinted that he sees the current market situation as “very bullish” amid contributing factors like high inflation, loss of purchasing power, spiraling debt and adoption by nation-states like El Salvador. Mow also has his own definition of a bear market:

“A bear market is what high time preference crypto investors experience periodically.”

Quantum Economics’ Greenspan supported Mow's remarks, arguing that Bitcoin has never even been in a bear market. “Taking the longest time frame for both past occurrence and future expectations, we can however determine that Bitcoin always has and always will be in a bull market,” he stated.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in

Self-custody Bitcoin amount unmeasurable so far, says Santiment exec

June 16, 2023 Coin Telegraph

Coin Telegraph

One of the most notable results of self-custody is that it tends to decrease circulation, which in turn reduces the market cap.

There is no way to measure the amount of Bitcoin (BTC) that is being sent to self-custody wallets so far, according to one industry executive.

Amid the ongoing FUD over lawsuits against major cryptocurrency exchanges, investors have been increasingly offloading their Bitcoin from crypto trading platforms.

As of mid-June, Bitcoin’s exchange supply fell to its lowest level since February 2018, according to data from the crypto intelligence platform Santiment. The massive exchange outflows have been triggered by the growth of self-custody fueled by uncertainty around Binance and Coinbase, Santiment said.

*BTC supply on exchanges since June 2017. Source: Santiment*

The growing self-custody trend has a massive impact on cryptocurrency markets, Santiment’s head of marketing Brian Quinlivan told Cointelegraph on June 15.

One of the most notable results of self-custody is that it tends to decrease circulation, thereby reducing the market capitalization tracked by websites like CoinGecko and CoinMarketCap.

“Circulation does tend to dry up as coins are moved off of exchanges,” Quinlivan said, adding that the increasing self-custody trend has a downside in the form of stagnant coins.

“This stagnancy can have a negative impact on market cap due to the lowered utility of the network as a whole,” the exec noted, adding:

“However, as long as there is still a healthy amount of exchange activity, which there has been, this generally should be enough to cancel out the negative impact of this current phenomenon.”

Quinlivan noted that coins moving off exchanges have more of a long-term impact on markets. “Traders sometimes assume that if a massive amount of tokens is suddenly moved off exchanges by whales, prices will immediately rise,” he said, adding that the firm has seen that it was usually a much more gradual rise.

The Santiment executive noted that Bticoin’s supply on exchange has plummeted from 16.1% on Black Thursday in March 2020 to 9.8% today. “Prices are still up 283% during this time span,” Quinlivan added.

While the self-custody trend continues to expand, it’s not quite possible to find out how much BTC is sitting on cold wallets, according to Quinlivan. He said:

“Assuming we have every exchange address in existence, which nobody does, then we would be able to measure precisely how much is moving to cold wallets at any given time just by subtracting out all of these known exchange addresses.”

The executive went on to say that for now, blockchain analysts can only give their best estimation.

“It is why our exact number of 9.8% of BTC on exchanges may vary slightly compared to other data out there. The longer time goes on, though, the more accurate data we are able to capture,” Quinlivan noted.

The news comes amid Bitcoin’s market capitalization continuing to shrink, according to data from CoinGecko.

*Bitcoin's market cap since April 2023. Source: CoinGecko*

Since mid-April, Bitcoin’s market value has dropped more than 15%, amounting to $494 billion at the time of writing. As previously reported by Cointelegraph, the BTC market cap reached its highest point of $1.28 trillion in November 2021, when BTC price hit the all-time high at $68,000.

Why have Bitcoin and crypto lost 60% of their market cap since their all-time highs?

May 26, 2023 Coin Telegraph

Bitcoin Price

Cointelegraph analyst and writer Marcel Pechman explains why the cryptocurrency market has lost 60% of its market cap, with the S&P 500 only about 15% from its all-time high.

Macro Markets, hosted by crypto analyst Marcel Pechman, airs every Friday on the Cointelegraph Markets & Research YouTube channel and explains complex concepts in layperson’s terms, focusing on the cause and effect of traditional financial events on day-to-day crypto activity.

The latest Macro Markets show begins by exploring why the crypto market capitalization is some 60% below its all-time high, while the S&P 500 is less than 15% away from its peak. For Pechman, the sector is suffering from a huge problem, as it doesn’t fit a commodity nor does it fit a foreign exchange currency. Moreover, not every mutual fund can hold crypto.

The lesson? If Bitcoin (BTC) and Ether (ETH) are mostly understood as alternative risk assets, that’s how they’ll trade. Consequently, one should not waste time looking for theories explaining why crypto has been unable to break new highs.

On to the next topic, according to Pechman, NVidia’s $2.3-billion short seller losses don’t provide the real picture. That’s because a short seller can endure pain if they don’t close the borrowing — so, as long as they have enough collateral deposits, those losses are still open.

That’s similar to what a buyer who paid a much higher price for their crypto is experiencing. Until this person makes the sale, the losses are not concrete. The difference is that the short seller needs to find someone willing to lend those shares to keep the trade open.

A Bloomberg article mentioned that Nvidia is the fourth-most shorted stock in the United States, behind Apple, Tesla and Microsoft. According to Pechman, the four most shorted stocks also happen to be top 10 S&P 500 components, which leads to an issue: Those short sellers may have been market neutral the whole time, buying index futures and selling individual stocks.

Lastly, the show debates China’s 5% growth, disappointing investors, and its consequences for the markets. For Pechman, the most important news is China’s reluctance to issue new stimulus packages, which could be a strategy to further weaken the remaining global economies.

The Bloomberg article shows how China is a key player in global commodities. If commodity prices and the global trade balance continue to weaken, that means less tax revenue for those other governments. Pechman highlights that Germany has just entered a technical recession, and the U.S. is right behind.

Pechman believes the outcome for crypto is initially negative, as it drains liquidity from markets, and investors will further reach for short-term government bonds and cash. But if the U.S. dollar loses strength, that’s positive for crypto in the medium term.

If you are looking for exclusive and valuable content provided by leading crypto analysts and experts, make sure to subscribe to the Cointelegraph Markets & Research YouTube channel. Join us at Macro Markets every Friday.

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Market Capitalization