Has the Cryptocurrency Bull Market Ended? A Technical and Fundamental Analysis

The cryptocurrency market is known for its volatility and cycles of bull (bull markets) and bear (bear markets), influenced by macroeconomic factors, institutional adoption, government regulation, and technological innovations. Currently, analysts disagree on whether the bull cycle that began in 2023 is still in effect or if we have entered a prolonged correction phase. This article aims to analyze key technical and fundamental indicators to better understand the current scenario.

1. Understanding Cryptocurrency Market Cycles

Cryptocurrency market cycles follow patterns similar to those of traditional financial markets and can be explained by various economic theories, such as Kondratiev cycle theory and Elliott wave theory. A crucial factor for bull cycles is Bitcoin's halving, which occurs approximately every four years and reduces the issuance of new coins. Historically, Bitcoin and altcoin bull markets follow this event due to the impact of supply scarcity.

Additionally, investor psychology plays a crucial role in these cycles. During bull periods, euphoria can lead to excessive valuations and speculative behavior. In bear periods, fear can trigger mass sell-offs and sharp price drops. This dynamic has been observed in previous cycles, such as the significant rally in 2017, followed by the 2018 crash, and the 2020-2021 bull run, which was succeeded by a major correction in 2022.

2. Technical Indicators: What Do the Charts Say?

Technical analysis provides key signals about market trends. The main indicators analyzed are:

Moving Averages (MA and EMA)

The 200-day moving average (MA200) is one of the primary indicators used to identify long-term trends. Historically, when Bitcoin trades above this average, it indicates a bullish bias. Currently, Bitcoin and other cryptocurrencies are operating above MA200, suggesting that the market may still be in an uptrend, although the strength of this trend is being questioned.

Relative Strength Index (RSI)

The Relative Strength Index (RSI) measures the strength of price movements and can indicate overbought or oversold conditions. In weekly charts, Bitcoin's RSI has shown overbought signals in recent months, suggesting that the market may be approaching a correction.

Trading Volume

A downward trend accompanied by declining trading volume can be a strong indication of exhaustion in the uptrend. Recently, a reduction in trading volume has been observed, especially in altcoins, which may indicate decreasing market interest and a possible weakening of the bull trend.

3. On-Chain Indicators: Market Liquidity

On-chain indicators help to understand investor behavior and market liquidity.

SOPR (Spent Output Profit Ratio)

SOPR indicates whether investors are selling at a profit or a loss. When SOPR is above 1, it suggests that most investors are realizing profits. Currently, this indicator shows that many investors are liquidating profitable positions, which could pressure prices downward.

Bitcoin Reserves on Exchanges

The amount of Bitcoin held on exchanges is an indicator of investor intentions. An increase in these reserves may signal that more investors are preparing to sell. Recent data shows a slight increase in this number, suggesting possible short-term selling pressure.

MVRV (Market Value to Realized Value)

MVRV measures the ratio between Bitcoin’s market value and realized value. High values suggest that the asset may be overvalued and nearing a market peak, while low values indicate a possible bottom. In past cycles, when MVRV exceeded 3, the market frequently reached a peak before a major correction. Currently, MVRV is in a warning zone, requiring caution from investors.

4. Macroeconomic and Regulatory Factors

Central Bank Monetary Policy

Monetary policy has a direct impact on the cryptocurrency market. Rising interest rates in the U.S. reduce market liquidity and discourage investment in speculative assets like Bitcoin. However, if central banks begin monetary easing and lower interest rates, this could boost demand for cryptocurrencies.

Regulation and Institutional Adoption

Government regulation can either drive or hinder the sector. The approval of Bitcoin ETFs in the U.S. and increasing adoption by large corporations indicate market maturity. However, restrictive measures in countries like China and India still create uncertainties.

Moreover, the integration of cryptocurrencies into the traditional financial system may provide more stability and reduce extreme volatility, making them more attractive to institutional investors.

5. Future Expectations

Despite volatility, some projections indicate that Bitcoin could reach values between $180,000 and $200,000 by the end of 2025, depending on institutional adoption and the inflow of new capital. However, factors such as regulatory changes, technological innovations, and investor behavior could directly influence this trajectory.

Other important aspects include the growth of the decentralized finance (DeFi) sector, which may attract more liquidity to the cryptocurrency ecosystem, and Bitcoin’s adoption as a store of value by companies and governments.

In a nutshell, there is no definitive consensus on whether the cryptocurrency bull cycle has ended. Technical indicators suggest a possible correction, but long-term fundamentals remain strong. Continuous monitoring of technical and on-chain indicators, as well as macroeconomic conditions, is essential for decision-making in the cryptocurrency market.

The increasing institutional adoption and integration of cryptocurrencies into the traditional financial sector may provide greater long-term stability, but volatility remains an inherent characteristic of this market. Therefore, investors should act prudently and base their decisions on well-founded analyses.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The cryptocurrency market is highly volatile and speculative, and any investment decision should be based on personal analysis and professional advice.