Since late 2022, the cryptocurrency market has experienced a robust uptrend led predominantly by Bitcoin, with Ethereum and other altcoins gradually catching up. This rally has sparked widespread speculation about when the current crypto bull market might finally conclude. Opinions vary—some predict the bull run may last until 2026, others speculate it could end by the close of 2024, while a few argue that ongoing macroeconomic factors, like continuous money printing, might even fuel a “super cycle.” To aid investors in understanding this complex landscape, it’s essential to examine the market cycles, key technical indicators, potential catalysts, and what could lie ahead for prices.
Understanding the Crypto Market Cycle
Cryptocurrency markets tend to follow a roughly four-year cycle: approximately one to two years of a bull market followed by two to three years of a bear market. Bitcoin typically leads these cycles, with other cryptocurrencies catching up as the bull phase progresses, often posting their largest gains towards the end of the rally.
However, defining precisely when a bull market begins or ends isn’t straightforward. Some analysts mark the start of a bull market at Bitcoin’s bottom, while others wait until it hits a new all-time high. For the sake of clarity, it’s useful to consider the bull market starting at Bitcoin’s "halving" event—a significant milestone historically tied to upward price momentum. The most recent Bitcoin halving occurred in April 2024, and based on past cycles, market highs often occur about 16 to 18 months later—pointing to an expected peak between August and October 2025. ### What Signals the Start of a Bear Market?
Similarly, there’s little consensus on when a bear market officially begins. A 20% price drop, a common definition in traditional finance, occurs too frequently to reliably mark a bear market in crypto since Bitcoin often experiences such dips even in strong bull runs. Others rely on chart patterns like double tops or head and shoulders, though Bitcoin has historically bounced back from these during bull phases.
One of the more reliable tools used by analysts is the Bollinger Band moving average on the monthly chart. Historically, when Bitcoin and major crypto market indices fall below their respective monthly Bollinger Band moving averages, it has signaled a transition into bear territory. For Bitcoin, this threshold currently sits near $82,000, roughly 30% above its current price, indicating that Bitcoin can drop significantly still and remain technically bullish. However, the combined market cap of smaller altcoins—often called "others"—is hovering just 10% above its monthly Bollinger Band average, suggesting altcoins might be closer to entering a bear market phase.
The Role of Technical Indicators: RSI and Market Tops
The Relative Strength Index (RSI) on the monthly timeframe is another helpful technical indicator. An RSI reading between 80 and 90 typically points to an overbought market condition, often preceding the end of a bull run. When this is coupled with prices breaking below shorter-term support levels such as the weekly Bollinger Band, it can signal that a market top is near and a downturn might be imminent. While these indicators provide clues, it’s important to remember that confirmation of market phases often only comes in hindsight.
Potential Catalysts That Could Trigger a Market Top
Historically, major bearish catalysts have hastened market downturns. For instance, the 2017 bull market ended following South Korea’s proposal to ban crypto exchanges, and the 2021 bull run faltered after Federal Reserve signals of interest rate hikes.
Looking ahead, several possible catalysts could emerge around the anticipated cycle top in late 2025:
- Regulatory changes such as the U.S. Treasury Department mandating Know Your Customer (KYC) rules for all stablecoin-related onchain activity.
- The expiration of a U.S. tariff pause on China, potentially sparking renewed trade tensions.
- Geopolitical escalations, such as increased conflict risks between China and Taiwan.
It’s critical to understand that these events likely won’t cause crashes directly but will amplify existing price pressures, especially when coupled with widespread leverage liquidations.
The Danger of Leverage and Liquidations
Leverage plays a key role in magnifying crypto market moves. In bear markets, forced liquidations of leveraged long positions can trigger rapid sell-offs. This pressure is even more severe in decentralized finance (DeFi) and centralized finance (CeFi) platforms, where liquidations can be much larger and take longer to resolve, resulting in prolonged, algorithm-driven selling pressure without corresponding buying support.
What makes this cycle particularly precarious is the significant involvement of institutional players and treasury management companies holding billions of dollars in crypto assets. As prices fall due to liquidations, these entities could be forced into selling positions, adding further downward momentum over an extended period.
When Might the Market Bottom?
Historically, Bitcoin has found its bottom roughly a year after peaking in a cycle. Based on this, if Bitcoin tops around October 2025, a bear market low might come between September and October 2026. Technical analysis using RSI suggests that a monthly RSI near 40 is a typical bottoming signal for Bitcoin.
However, markets can deviate from historical trends due to unexpected catalysts or large-scale liquidations. For example, in the previous cycle, the collapse of FTX—a major crypto institution—significantly exacerbated market downturns and sentiment. In the next bear market, similar collapses or distress among large treasury companies or stablecoin issuers like Tether (a prominent CeFi lender) could push prices even lower.
Sentiment also matters: the phase when most participants become overwhelmingly bearish and declare the market “dead” often coincides with the actual bottom—a classic contrarian indicator.
How Low Could Prices Go?
Predicting exact bottoms is challenging, but prior cycles offer some guidance. Bitcoin has historically not fallen below its previous cycle top; since the last top was around $70,000, the bottom in the next bear market might hover around $60,000 to $80,000. Altcoins, however, often behave differently—some dropping up to 90-95% from their cycle highs, as seen in past crashes such as the collapse of Terra.
In a more severe scenario—triggered by a perfect storm of negative catalysts and leverage unwind—the market could fall significantly lower, potentially to levels unseen before. Such a crash might also prompt regulatory interventions or monetary policy responses, reshaping the crypto landscape and which projects survive into the next cycle.
Conclusion: Prepare for Turbulence, but Crypto is Here to Stay
While the exact timing and severity of the next crypto downturn remain uncertain, the weight of historical patterns, technical indicators, and potential catalysts suggests that the current bull market may be nearing its end. A standard bear cycle appears probable, and understanding the dynamics outlined here will be crucial for survival and positioning ahead of the next uptrend.
As always, investors should approach the market with caution, leveraging a mix of technical analysis, awareness of macro and regulatory developments, and a keen eye on leverage levels and market sentiment. Despite the inevitable downturns, crypto continues to evolve and mature, presenting opportunities for those prepared to navigate its cycles.
Note: This article is educational and reflects market analysis based on recent trends and historical data. It is not financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.
By Wolfy Wealth - Empowering crypto investors since 2016
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Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile.
