Crypto’s First Secular Bear Market: A Looming Shift
Seasoned crypto analysts are buzzing about a potential first-ever secular bear market in the crypto industry. This could mean a prolonged downturn, lasting several years, a stark contrast to the shorter cycles we’re accustomed to.
The Dot-Com Bust Analogy
The discussion sparked on X (formerly Twitter) when a user asked @CredibleCrypto, a renowned crypto analyst, about the impact of celebrities and athletes entering the crypto space with their own coin offerings. @CredibleCrypto believes this trend could lead to a significant shakeout, similar to the dot-com bubble burst, where weaker projects fade out, and stronger ones rise to the top.
“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 said.
The Euphoria Before the Crash
Another analyst, @astronomer_zero, notes that markets often experience a surge in euphoria before a crash. He expects a similar pattern before a secular bear market, potentially starting in 2026/2027. “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’,” @astronomer_zero remarked.
S&P 500: A Blow-Off Top?
The S&P 500 is already exhibiting a steeper angle than in 2007, leading some analysts to predict a “blow-off top” scenario. While this is not directly linked to Bitcoin, @astronomer_zero notes that Bitcoin is evolving into a safe-haven asset faster than anticipated.
Recession and Fed Intervention
Henrik Zeberg, head macroeconomist at Swissblock, forecasts 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 hits in December 2024. He suggests that the US Federal Reserve’s efforts to avoid a recession through liquidity injections could push major indices to new highs before the downturn.
Secular Bear Market History
Secular bear markets, characterized by extended periods of declining asset prices, have historical precedents in traditional finance. The Great Depression (1929-1942) and the Dot-com Bubble Burst (2000-2013) are prime examples. The NASDAQ, for instance, took until 2015 to recover to its 2000 peak after the dot-com bubble burst.
Bitcoin’s Price Action
At the time of writing, Bitcoin is trading at $57,188. It remains to be seen if the predictions of a secular bear market will come to fruition, but the conversation around this potential shift highlights the dynamic nature of the crypto market.
While this information is educational, it’s crucial to conduct your own research before making any investment decisions.
