By Chris Hollingworth 
The ongoing Bitcoin (BTC) bear market, characterized by a 20% or more decline from its all-time high, is currently showing signs of being relatively mild in terms of severity and is expected to last for approximately 90 days, according to market analyst Timothy Peterson, well-known for his work on Metcalfe’s Law as a Model for Bitcoin’s Value. Peterson’s analysis compares the current downturn to the ten previous bear markets, which tend to occur roughly once per year. He notes that only four bear markets have exhibited a more prolonged price decline compared to the current situation, with instances in 2018, 2021, 2022, and 2024 standing out in terms of duration.
Despite the downward trend, Peterson predicts that BTC is unlikely to significantly drop below the $50,000 price level due to ongoing adoption trends. Conversely, he also suggests that based on momentum, it is improbable for BTC to dip below $80,000. Peterson further adds that a temporary slide may occur in the next 30 days, potentially followed by a 20-40% rally post-April 15. This anticipated movement, as indicated by the charts around day 120, could serve as a catalyst to lure back hesitant investors and push Bitcoin’s value even higher.
The recent downturn in the crypto markets can be attributed to the repercussions of United States President Trump’s imposition of tariffs on several US trading partners, triggering retaliatory tariffs on US exports and fueling concerns of an extended trade conflict. This trade war sentiment has led investors to shy away from risk-on assets, reflecting a diminishing appetite for speculative investments amidst the prevailing macroeconomic uncertainties.
Analyzing the data, the Glassnode Hot Supply metric, which measures BTC holdings for a week or less, dropped from 5.9% during the historic bull run in November 2024 to a mere 2.3% as of March 20. According to Nicolai Sondergaard, a research analyst at Nansen, the crypto markets are likely to grapple with trade war pressures until April 2025, pending potential international negotiations aimed at easing or resolving the trade tariffs.
Moreover, insights from CryptoQuant highlight that a significant portion of retail traders are already engaged in BTC investments, dispelling earlier expectations of a substantial influx of retail traders injecting fresh capital and boosting market prices in the near future. The trade war-induced market volatility has also cast doubts on Bitcoin’s perceived safe-haven status, as its value tumbled in response to tariff-related headlines alongside other risk and speculative assets.
In summary, market analysts and data trends indicate a period of cautious optimism amidst the current Bitcoin bear market, with expectations of potential price fluctuations and market dynamics influenced by external factors such as trade tensions and investor sentiment. As always, investors are advised to conduct their own thorough research and exercise prudence when making financial decisions in volatile market conditions.
