The ongoing crypto market bear has brought substantial hardship to investors. Nevertheless, this is not the first or even the last bear period for the crypto industry. In light of this, the latest report by the digital asset management giant, Grayscale came with a ray of hope, predicting a timeline for the end of this bear and the commencement of the next bull.
The report collected data regarding previous crypto cycles and asserted that the ongoing bear could potentially end in another 250 days from July if the duration of previous cycles repeats itself, further marking the beginning of the next bull. It stated that “crypto market cycles, on average, last ~4 years or approximately 1,275 days”.
The report overlaid metrics with bitcoin’s realized price on top of the market price (the current trading price of an asset), using bitcoin prices as a proxy. However, Grayscale’s charts excluded the cross in realized price below market price in March 2021 “due to extreme market volatility in response to the Covid-19 pandemic”.
Furthermore, the report also noted that with every passing crypto market cycle, it takes longer to peak each time. In “2012, the market took 603 days to peak, increasing approximately 180 days for each subsequent cycle, with 2016 taking 786 days, and 2020 taking 952 days to the peak. From peak-to-trough, the 2012 and 2016 cycles lasted approximately 4 years, or 1,290 and 1,257 days respectively, and took 391 days to fall 73% in 2012, and 364 days to fall 84% in 2016”.
Subsequently, it added that “in the current 2020 cycle, we are 1,198 days in as of July 12, 2022, which could represent another approximate four months left in this cycle until the Realized Price crosses back above the Market Price”.
Grayscale Investments took into account the increasing lengths of a bear period, expecting it to end in another 250 days. Meanwhile, earlier this year, the leading crypto exchange platform, Huobi CEO, Du Jun’s also predicted a prolonged bear period for the crypto market. However, he compared the then-bitcoin chart patterns to previous BTC halvings, correlating it to the next bull run, predicting that it is unlikely to happen before 2024 or even 2025. (BTC Halving Countdown: 677 days).
In his interview with CNBC, Du Jun referred to the halving phenomenon, calling early 2022 — the beginning of the bear run before the next halving in 2024. He said,
“If this circle continues, we are now at the early stage of a bear market. Following this cycle, it won’t be until the end of 2024 to the beginning of 2025 that we can welcome the next bull market on bitcoin”.
Additionally, when BTC was floating above $40,000 during the early days of 2022, its “Entity-Adjusted Dormancy Flow” displayed that long-term investors had “significantly reduced their $BTC spending behavior”. This simplistically means that even when the BTC price was double of what it is today, investors portrayed a high HODL mentality, instead of liquidating their assets.