Bitcoin's recovery in recent weeks has resulted in a shallower drawdown than any previous bear market, with analysts divided on whether the cycle has fundamentally changed.
The leading cryptocurrency has dropped roughly 36% from its October all-time high of $126,080, currently trading around $80,500. Historically, Bitcoin bear markets have seen declines of 40% to 50% from cycle peaks.
Pierre Rochard, CEO of The Bitcoin Bond Company, attributed the decoupling to a muted bull market upfront, ETF inflows, and corporate Bitcoin treasury accumulation. Ryan Yoon of Tiger Research said institutional capital from ETFs and major holders like Strategy has created a structural price floor.
Not all are convinced. Illia Otychenko of CEX.IO noted that while Bitcoin trades above key on-chain metrics like True Market Mean and Short-Term Holder cost basis, similar conditions preceded bear market resumptions in 2014, 2018, and 2022.
Nearly 70% of short-term holder supply is now in profit, which historically creates selling pressure. With Bitcoin's one-year volatility near all-time lows, any major move carries outsized weight. Otychenko added rising U.S.-Iran tensions have made Bitcoin more sensitive to macro developments.
Yoon outlined two paths: investors could rotate into Bitcoin if stocks stay flat, or an AI bubble burst could trigger a crash that sends Bitcoin lower. Prediction market Myriad assigns only a 2% chance of a U.S.-Iran diplomatic meeting by May 15, which would remove the peace catalyst that drove recent gains.