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The US strategic reserve news is received as a sell-the-news event.
We clarified this in the last crypto market report.
Signs of a Bear Market: What to Watch For
So, short-term bearishness is going on. What about long-term bullishness? Is it a bear market? It is a tricky question to answer. Let’s clarify what a bear market is:
- Low volatility
- Prolonged boring period
- Aggressive dumping and slow recovery
There are some usual indicators of a bear market, too. These invariably happen in a bear market or a market heading towards a bear market.
- Big projects capitulating
- Collapse of big projects – Luna and FTX are good examples.
- New projects failing – Too many rug pulls
- Major setbacks from the regulatory perspective – China banning BTC, SEC blacklist more coins, etc. – Actually, Regulation is welcoming crypto in the US and even in China. India is an exception, but it is a smaller market compared to the US.
Here is an example of the last bear market: 2022-23. Bitcoin was trading below $25K for 276 days. Injective was trading around $1.5 – $2.5.
So, are we in a bear market? NO. Are we heading to a bear market? Let’s check 3 indicators.
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MVRV
MVRV is at 1.8 and in a downtrend. This means the market may be heading to a bear market. Let’s verify this with miners’ holdings. Miners are holding strong.
Are they making more money? NO. Miners are getting just enough revenue to survive. This indicates the market is not heading to a bear market. Who is selling then? Retail.
The Short-Term Holders stats reveal that most of them are selling and realizing losses (note that the current value has been the lowest since August 2024).
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Leverage
In a bear market or a market heading to a bear market, the leverage steeply falls. However, the current leverage ratio is at a healthy level and has started recovering. In such situations, the market slowly follows the direction of the leverage.
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Fear and Greed
Fear and Greed are the final indicators. The indicator is still at the Extreme Fear territory. This means the majority is afraid of the market turning into a bear market.
Now, let’s ask ourselves. What is retail doing? Retail is selling, and they are afraid. What are miners doing? Miners are holding as they are not very profitable. What are institutions doing? BlackRock bought $1 billion worth of Bitcoin at the end of January. While their Bitcoin ETF saw $1.25 billion worth of outflows last week. Institutions are buying and retail is selling.
What are crypto influencers doing? Crypto ‘experts’ in Twitter and YouTube are suggesting a massive crash is coming. Perma bears like ProfitBlue, Capo, etc are active again. What is the macro situation? So, the US promised not to sell BTC anymore. They are trying to figure out how to buy more. S&P 500 has retraced 6% from its All Time High in February. Inflation is below 2% (This is not retail inflation – the cost of living is still going up). AI is proving to cost jobs. Many entry-level positions are getting outdated because of AI. So, people are holding a grudge against tech, too.
A recession may be coming in the US?
10 10-year bonds are offering lower rates. This means the demand for bonds is high and the demand for BTC and crypto is low. We may see a reversal from here, which means Bond interest may go up.
So, macro looks bad for risky assets like Bitcoin. Let’s check the monthly returns.
In the last 5 months, 4 were negative. So, it is reasonable to be afraid. Let’s look at patterns:
- Both February and March ended up giving negative returns only twice – in 2014 and 2020.
- In 2014, recovery was slow and short-lived.
- In 2020, recovery was aggressive and long-lived
So, will 2025 be like 2020 or 2014? 2020 was a rare phenomenon because of covid. We can not expect similar returns in 2025 because there was no COVID-like crash.
What about the Alt Rally?
ETF is the one to blame. Traditionally, whales dump BTC and buy ETH at some point in the cycle. Then they dump ETH and buy ETH-based assets, and highcaps, then midcaps. The whole cycle was destroyed because of the Bitcoin ETF. Now, if investors cash out, they get dollars.
But alt rallies are the soul of crypto cycles. VCs and institutions have poured so much money into alts, and they will not like the idea of BTC entering the bear market without an alt rally. We have waited long enough for one, too. Let’s check Total3 – the marketcap of all alts excluding BTC and ETH.
The green box represents the bear market. After breaking out of the bear market, Total3 made a high at $785 billion. Then, it almost retested the green box in July 2024. In the second half of 2024 and in January 2025, Total 3 retested the all-time high marketcap. We expected a breakout – which did not happen.
Right now, total3 is retesting the 2024 high. If it holds, we can expect another retest of $1.1 Trillion and a breakout. This has happened before, too. Notice the multiple retests of the 2017 high and 2018 high.
If the $785 billion support holds, we will have a short alt rally towards the all-time high resistance. That’s our best bet right now and the reason for holding. If the support breaks, we will start offloading coins. Let’s hope it does not happen.
Coins that performed well initially in late 2023 and early 2024 – like Injective, Arweave, etc – may not follow the same path. They might start pumping slowly to make new yearly highs. Projects with huge vesting in 2025 – like Celestia, Altlayer, Omni, etc, can pump good too. However, we will use those pumps as exit liquidity.
AI had its time. The bubble has already burst. Existing high-quality AI projects will stay, and the rest will disappear in the coming months, similar to the metaverse coins.
Conclusion
So, macro suggests that risky assets are ugly now. At the same time, Bitcoin is a bit too popular, especially after the Trump saga. Trump’s launching 2 memecoins and a DeFi platform do not help the situation.
Onchain and sentiment suggest the local bottom has already happened. So, here is the plan. So, if the market moves like it did in 2020 (not likely), we will hold and get high returns. If the market moves like in 2014, we can exit risky positions in the relief pump (can take a few months).
If March finishes as a bullish month, that will be a new condition. In the history of Bitcoin, whenever February was negative, March followed February. At the same time, we will keep an eye on total3 to determine whether it could hold the support or not.
We should not take panic decisions. Peak manipulation is going on in the market. See what institutions are doing vs what influencers are saying. Follow proper risk management, and you will be fine.
Since BlackRock has shifted its attention to ETH, we believe the alt rally can happen this cycle. Our convictions are not based on hopes and wishes. We have seen multiple cycles, and the story is almost similar. Retail sell and crypto pump. Retail buy and crypto dump. Counter trade retail once more.
With that said, Bitcoin is likely to break down the $80k support. It has been tested multiple times and looks too weak. We can expect quick wicks to $75k or in the worst case scenario $66k. If that happens, don’t panic. Just hold and if you have spare USDT, DCA into high caps, especially SUI. If Bitcoin closes below $75k (daily candle), we can confirm the bear market.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers, and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
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