Bitcoin’s decline less severe than in past, but bear market not over yet

Bitcoin has shown a clear pattern over the years: the price declines from the peak are becoming less extreme with each cycle. That sounds reassuring, but according to analyst crypto_birb, it does not mean the current downturn is already over. The Bitcoin price currently stands at $65K, a decline of 0.4% over the past 24 hours.

Bitcoin is available at OKX and Bybit.

In brief:

• In the 2011 bear market, Bitcoin lost as much as 93.1% of its value; in the current cycle, the maximum decline is 53.2%.
• With each bull run, the percentage declines become smaller, which points to a maturing market.
• Yet the analyst warns that the bear market is not over yet.

From 93% to 53%: the declining trend in drawdowns

In 2011, Bitcoin was still a niche experiment and the market reacted accordingly: a price loss of 93.1% from the peak. The bear markets that followed were still painful, but less extreme. The subsequent cycles showed declines of 88%, 83.5% and 76.6% respectively from the highest point.

In the most recent cycle, the maximum pullback so far stands at 53.2%. That fits the sequence of ever smaller extremes. As institutional interest grows and the market expands, the intensity of the fluctuations decreases. That is a logical consequence of a larger and more mature market with greater liquidity.

Bear market not over yet despite declining volatility

Although the trend in the chart looks positive, crypto_birb does not draw an optimistic conclusion from it. The analyst states that the market is indeed becoming calmer with each cycle, but that this does not mean the current decline has already come to an end. According to him, the bottom has not yet been reached.

That is remarkable, because at the same time, large amounts have been flowing into Bitcoin ETFs for several consecutive days. Yet broader market conditions show that Bitcoin is still under pressure. Also, nearly a quarter of miners are operating at a daily loss, which shows that the market has not recovered on several fronts. Whether the bear market is truly over therefore remains the big question for now.