There is often a lot of exaggeration in strong Bitcoin moves, whether bullish or bearish. When prices go up, the markets are euphoric and make the wildest predictions. Conversely, when prices fall, everything is over, everything is dead, cryptos are doomed to disappear. Today we take a step back to go back in time, to (re)discover the various bear markets. Heading for the bear markets successive, from newest to oldest.
Bear Market #5 (Current): After High at $69,000, Bitcoin Falls Below $19,000
Catalysts : Russian-Ukrainian conflict – Fed rate hike – Arbitration attack and Terra collapse – Massive leverage effects
Chute : 72%
Top 5 before bear market : Bitcoin (BTC) – Ethereum (ETH) – Binance Coin (BNB) – Ripple (XRP) – Cardano (ADA)
The bear market The current situation took place in a particularly degraded macroeconomic context. The war in Ukraine, which began on February 24, began by causing all the equity markets to fall. The equity indices, which had jumped sharply in 2021, erased almost all their post-pandemic gains.
Logical consequence of the soaring prices of raw materials linked to the conflict: gas, oil, wheat, etc. Snowball effect, which saw the price of almost all foodstuffs sold in Europe jump. In such an environment, large investors have a habit of fleeing risky assets and take refuge in stable values (say “refuges”) : AAA-rated government bonds (starting with US Treasuries), US dollar, Gold…
In May, the TerraLuna ecosystem undergoes a short sale attack who carries his stablecoin UST and his crypto LUNA. But the UST capitalized at more than 14 billion dollars and was the 3th market stablecoin. The bankruptcy of the project has a domino effect because several big players held big positions in LUNA / UST.
The lending platform Celsius (12 billion dollars under management) is the first to announce the suspension of all of its activities, notably freezing withdrawals of its 1.7 million customers. Two days later, it was the turn of the Singapore fund Three Arrows Capital (up to 10 billion under management at the end of 2021) to lay down their arms, leaving many investors in difficulty there too.
Bear Market #4 (2021): After a high of $63,000, Bitcoin falls back to $29,000
Catalysts : Rumors About Mining Regulation – Chinese Anti-Cryptocurrency Campaign
Chute : 55%
Top 5 before bear market : Bitcoin (BTC) – Ethereum (ETH) – Ripple (XRP) – Bitcoin Cash (BCH) – Cardano (ADA)
2021 has been a banner year for BTC. The cryptocurrency crossed on February 18 the bar of the billion capitalization, after surpassing $53,700. This milestone follows 12 months of extreme extreme volatility for Bitcoin, with the token’s capitalization surging more than 10x since bottoming out in the Bitcoin flash crash. “black thursday” on March 2020.
But shortly after hitting new all-time highs in mid-April, BTC fell sharply back to $29,000 within three months. What happened ? In hindsight, this mini bear market came amid a media narrative suggesting that thedisastrous ecological impact of mining could be worth to Bitcoin a unprecedented turn of the screw from the states.
FUD around Bitcoin is further exacerbated by Tesla’s decision toabandon BTC as a means of payment in May, its CEO Elon Musk again arguing ESG concerns (just three months later, Musk admitted that around 50% of Bitcoin mining was powered by renewable energy).
The bear market did not last long. And this despite the launch by the Chinese state of a major campaign of repression against local mining farms. The uptrend returned at the end of July as bitcoin finally hit its all-time high over $69,000 in november 2021.
Bear Market #3 (2018): Bitcoin Plunges Below $3,300 After Hit $20,000 in Late 2017
Catalysts : Coincheck Platform Hacks – FED Rate Hike – Fraudulent ICOs
Chute : 84%
Top 5 before bear market : Bitcoin (BTC) – Ethereum (ETH) – Ripple (XRP) – Bitcoin Cash (BCH) – Cardano (ADA)
Here again, a good year preceded a brutal fall. After rising to $1,000 in January 2017, BTC continues to rise and crosses $20,000 at the end of the year. However, the triumph was short-lived: in a few months, it lost more than 60%, falling to 3200 dollars.
It is therefore in 2018 that we hear for the first time abouthiver crypto, a reference to the series Game of Thrones. And this winter begins with the difficulties of Coinchecka Japanese cryptocurrency exchange that undergoes in January 2018 a mega-hack. The attacker managed to steal nearly $530 million in NEM (XEM) tokens.
The impact in terms of reduced liquidity in the market is further compounded when tech giants like Facebook and Google prohibit advertisements for ICOs and crypto project advertisements on their platforms in March and June 2018 respectively.
We can also attribute part of the bearish sentiment to the multiples rejections of a Bitcoin spot ETF over there Securities and Exchange Commission (SEC), despite the insistence of managers such as Grayscale, VanEck et ProShares.
Bear market #2 (2014): $1000 to under $200 in early 2015
Catalysts : Closure of the Silk Road marketplace – Bankruptcy of the Mt. Gox platform
Chute : 85%
Top 5 before bear market : Bitcoin (BTC) – Ethereum (ETH) – Ripple (XRP) – Litecoin (LTC) – Dash (DASH)
2013 is a very important year for the Bitcoin project. Probably the most important of the project. Firstly because in October 2013, the famous plateforme Silk Road is officially arrested by the FBI. Silk Road was an online black market, the first modern market for darknet. The importance of Silk Road is to be underlined because in the history of Bitcoin it represented the first form of widespread adoption of the token by users.
If Silk Road was taken offline on October 25 in the morningthe price of BTC continued to climb until late November before the market had fully digested the effects of the event.
Looking back over the years, it seems ironic that the media did not help paint a clear board reality. Even as the price of Bitcoin began to decline, the cryptosphere media remained eerily bullish …and not just any ones,”Bitcoin price hits $1,000 after doubling in 7 days. And after?” (CoinDesk), “Bitcoin Price Could Hit $98,500, Wall Street Analysts Predict” (still from CoinDesk).
Same during the long lateralization phase of BTC between January and May 2015. The general sentiment in the headlines was negative while many signals clearly indicated that the bottom had been recorded.
In the meantime, several aggravating events: 96,000 BTC lost on the Sheep platform (December 2013), the indictment of the CEO of the BitInstant platform for laundering (January 2014) and of course the bankruptcy of the famous platform Mt. Gox led by “Bitcoin baron” Mark Karpelès (February 2014).
We purposely left out the bear market #1 (2011)who saw the first crash Bitcoin from $32 to $0.01. Bitcoin price broke its first psychological mark at $1 in late April 2011 to begin its first historic rally. But the joy of hitting $32 (on June 8) was short-lived due to a hack on the Mt. Gox platform (850,000 BTC) and a spiral of massive selling.
It is difficult to follow the price of Bitcoin before 2013. Portals such as CoinGecko or CoinMarketCap did not track BTC prices until April 2013.
