Has the Bitcoin Bull Market Ended? Data Signals a Downturn

# Cryptocurrency Market Enters Bearish Phase, Analysis Shows The cryptocurrency market has reportedly entered a pronounced bearish phase. According to The Defi Report, the market is currently in the stage of wealth destruction—a trend that is likely to persist for the next nine to twelve months. # Has Bitcoin Peaked? Bitcoin experienced a significant drop to $78,258 in February 2025 and is currently oscillating around the $80,000 mark. Many view January 2025 as the peak of the bull market. Factors contributing to this viewpoint include slowed price increases before Bitcoin's halving, increased selling by long-term holders as indicated by on-chain data, and reduced liquidity. In this context, The Defi Report notes that contrary to expectations that the Trump administration's economic policies would positively impact the cryptocurrency market, the bearish trend is likely to continue. The report highlights that Bitcoin’s price movements have deviated from previous bullish patterns and that rebound signals within the market are weak. # Four Phases of the Market Cycle, Current 'Wealth Destruction' Phase The cryptocurrency market typically moves through a four-phase cycle: initial bull phase, wealth creation phase, wealth distribution phase, and wealth destruction phase. The Defi Report indicates that the market has entered the 'wealth destruction' phase, which began in earnest after hitting the peak in January 2025. ## Initial Bull Phase (January 2023 - October 2023): A Slow Start At the start of 2023, the market was recovering from the FTX collapse's impact. Trading volumes were low, and cryptocurrency community activities on platforms like Twitter had slowed, with many investors adopting a wait-and-see approach. Despite this, Bitcoin showed a gradual upward trend, moving from $16,500 to $33,000. This phase was characterized by low volumes and cautious investor behavior. ## Wealth Creation Phase (November 2023 - March 2024): Explosive Growth From November 2023 to March 2024, the market entered a robust bull phase with significant capital inflows, particularly into the Solana ecosystem, which drove investor interest. Bitcoin soared from $33,000 to $72,000, Ethereum from $1,500 to $3,600, and Solana from $20 to $200. Key features included the popularity of airdrops, increased venture capital investments, and the beginning of the 'meme season'. This period saw projects like Pyth, Marinade, Raydium, and Orca garner renewed interest, and venture capital experience a fervent boom. Despite this, signs of overheating began to surface. ## Wealth Distribution Phase (March 2024 - January 2025): Bubble Formation and Mass Entry From March 2024 to January 2025, the market saw its hottest phase, marked by explosive public interest. Headlines like “Strategic Bitcoin Reserves” and “Tesla Buys BTC” were prevalent, and celebrities entered the cryptocurrency market. Bitcoin climbed from $72,000 to $90,000. The market saw a massive influx of new investors, rapid meta-trend shifts, and an increase in speculative investments. The optimistic WAGMI (We’re All Gonna Make It) sentiment prevailed, but the high public entry often signals the peak of bull markets historically. ## Wealth Destruction Phase (January 2025 - Present): Entering the Bear Market Since January 2025, the market has turned bearish. Factors that drove prices during the bull market can no longer sustain the upward momentum. Despite rebound attempts, the market continues to decline. The key features of this phase include the disappearance of bullish factors, weakened investor sentiment, and increased liquidations. Bitcoin’s price remains around $80,000, and the pervasive sentiment is that the bull market is over. The latent issues within the market have yet to surface, but further project failures or bankruptcies could follow as CeFi companies have already downsized significantly. # Bearish Signals from On-Chain Data On-chain data reveals bearish signals such as declining MVRV ratios for long-term Bitcoin holders, a sharp drop in Solana DEX trading volumes, and reduced new token issuance. Specifically, Solana’s daily new token issuance has decreased by 72% from over 20,000. The slowing Bitcoin price rise is evident from MVRV metrics and realized price data. For instance, MVRV reached 12.5 in the 2017 bull cycle but only 4.4 in the 2024-2025 cycle, indicating a 35% drop in growth potential compared to previous cycles. Similarly, the average Bitcoin buying price has risen from $357 in 2013 to $54,030 in 2021, and to $43,240 in 2024, pointing towards Bitcoin becoming a more stable, long-term growth asset. Nevertheless, some bullish proponents remain optimistic about a market recovery, citing possible short-term rebounds driven by global M2 growth and increased liquidity. However, the persistence of these factors remains uncertain. # Identifying Market Triggers The question now is what will trigger the end of this market cycle. Past cycles have seen triggers like the Terra Luna collapse (2022), followed by the bankruptcies of Three Arrows Capital (3AC), BlockFi, Celsius, and FTX. Although no major bankruptcies have been confirmed in this cycle, the smaller number of centralized financial companies could mean different collapse dynamics. Current risk factors include: *Exchange Risks*: Mid-sized exchanges may be over-leveraged or involved in potential fraud, as historical exchange collapses have caused significant market shocks. *Stablecoin Risks*: Projects like Ethena (USDe) are major causes of leveraged expansions. USDe is valued at approximately $5.5 billion and operates by maintaining a fixed price through cash holdings and carry trades. However, similar past structures that relied on centralized exchanges faced considerable counterparty risks, potentially leading to systemic collapse if market volatility increases. *Loan and Collateral Liquidations*: The DeFi lending market remains vulnerable in this bearish phase, with protocols like Aave holding $11 billion in active loans, down from a peak of $15 billion. High loan balances carry potential liquidation risks, as previously seen during market downturns. *Institutional Investor Movements*: The behavior of institutional investors holding large quantities of Bitcoin is a crucial market variable. Strategies involving BTC-backed loans for additional purchases, practiced by entities like Michael Saylor’s, could face pressure if Bitcoin prices plummet, leading to significant sell-offs. # Risks of Entering the Market Prematurely Experts caution against prematurely entering the market during the wealth destruction phase. The Defi Report warns that historically, market bottoms occur post-major liquidations, suggesting adjustments could extend over a year. However, bear markets can also provide pivotal moments to prepare for the next bull cycle. Investors should closely monitor structural changes in the market to strategically adapt.