A new narrative is emerging among seasoned crypto analysts who are now forecasting the advent of the industry’s first ever secular bear market. This prediction suggests a sweeping transformation could be imminent, characterized by a prolonged downturn lasting potentially for years, diverging from the relatively short-term cycles typically associated with the crypto market.
Crypto’s First Ever Secular Bear Market
The conversation around this shift was sparked by a query to CrediBULL Crypto (@CredibleCrypto), a renowned crypto analyst with 417,000 followers on X, who was asked about the impact of celebrities and sports stars entering the crypto space with their own coin offerings. Responding to concerns that this trend might dilute the purity and utility of cryptocurrencies, @CredibleCrypto offered a decisive view on the future trajectory of the market.
“Most of this stuff will get wiped out in the next bear market imo. Our first secular bear market in this space since inception. The .com bust of crypto – where 99% of the junk will be erased, never to return, while the FAANG of crypto will emerge on the other end and thrive for the next couple decades (.com boom of crypto),” @CredibleCrypto remarked.
This analogy to the dot-com bubble posits that much like the burst that cleared out weaker internet stocks while establishing tech giants, the secular crypto bear market could similarly purge lesser, speculative projects and pave the way for stronger projects to dominate.
Adding to the discourse, @astronomer_zero, another crypto analyst, highlighted the typical market psychology that precedes such downturns. He remarked, “Yeah, the party is soon over. After we move into euphoria first once more, because markets almost never crash on fear. And for a big crash, big euphoria is required. ‘A bubble cannot pop if it doesn’t exist’. Just so we can have a slightly bigger taste of celebrity/main adoption bubble greed, pulling in more liquidity to fuel the drop. Secular bear market starts in 2026/27.”
Remarkably, the S&P 500 is already moving towards a “blow off top” scenario. As noted by another analyst, the S&P 500 is already showing a steeper angle than in 2007 prior to the Great Financial Crisis (GFC). Astronomer clarified: “That is true and this move is part of the final stages. But that is SPX. I talked about how SPX is not correlated to BTC and how BTC is evolving to an asset of safety faster than the general public’s expectations.”
Calls for a US recession and a blow-off top for the global financial markets are getting increasingly louder on X.
One of the most vocal proponents of this theory is Henrik Zeberg, head macroeconomist at Swissblock. He suggests that preemptive measures by the US Federal Reserve, aimed at staving off a recession through substantial liquidity injections, could drive major indices to new heights.
Specifically, Zeberg forecasted the S&P 500 reaching between 6,100 and 6,300, the Nasdaq climbing to between 24,000 and 25,000, the Dow Jones to about 45,000, and Bitcoin peaking between $115,000 and $120,000 before a recession sets in around December 2024.
The concept of a secular bear market, while new to the crypto market, has historical precedents in traditional financial markets. Such periods are marked by a downward trend in asset prices over extended periods, often spanning multiple economic cycles. Unlike cyclical bear markets that are relatively short-lived and followed by quick recoveries, secular bear markets exhibit prolonged stagnation or decline, interrupted occasionally by partial recoveries that do not revert to previous highs.
The most-widely known examples for secular bear markets are The Great Depression (1929-1942) and the Dot-com Bubble Burst (2000-2013). Following the burst of the dot-com bubble in 2000, the US stock markets, particularly technology-heavy indices like the NASDAQ, experienced a significant downturn. The NASDAQ did not regain its peak 2000 levels until 2015, marking a long period of recovery.
At press time, Bitcoin traded at $57,188.
Featured image created with DALL.E, chart from TradingView.com