The Bitcoin bull-bear market cycle indicator, which tracks phases of investor sentiment, has shifted to signal bullish conditions after three days of flashing bearish signals as Bitcoin’s price plunged to levels not seen since February.
“Most Bitcoin on-chain cyclical indicators that were hovering near the borderline have now shifted back to signaling a bull market,” CryptoQuant founder and CEO Ki Young Ju wrote in an Aug. 9 post on X (formerly Twitter). Pseudonymous crypto trader PlanB added, “Bitcoin is still in a bull market.”
The indicator had entered “Bear” territory when Bitcoin’s price dropped below $50,000, following a steep decline to $49,751 on Aug. 5, a day now referred to as “Crypto Black Monday.” This marked the first time Bitcoin fell below $50,000 since February. Bitcoin continued to trade below the critical $60,000 level until Aug. 8, according to CoinMarketCap data. At the time of writing, Bitcoin is trading at $60,732.
This recent downturn marked the first bear signal from the bull-bear market cycle indicator since January 2023, shortly after the FTX collapse. The Crypto Fear & Greed Index also reflected this bearish sentiment, hitting an “Extreme Fear” score of 17 on Aug. 6, the lowest since the FTX crash. The index has since recovered to a “Neutral” reading of 48.
Some traders believe the swift reversal suggests the recent price dip could have been a bear trap, where experienced traders sell Bitcoin in a controlled manner to temporarily lower the price and trap short-sellers.
Analysts are divided on what comes next. While some see the recent downturn as a precursor to a bull run, others remain cautious. On Aug. 7, 10x Research’s head of research Markus Thielen suggested waiting for Bitcoin to drop into the low $40,000s to time the next bull market entry. Meanwhile, veteran trader Peter Brandt noted that Bitcoin’s decline since the halving is similar to the 2015-2017 halving bull market cycle, hinting at a potential bull run ahead.
