Crypto Market Transition – Bull Run to Bear Market?
Key Takeaways
Crypto Market Uncertainty in 2025: The market is transitioning into a consolidation phase, with the potential for both bullish and bearish trends. Experts predict opportunities and risks for investors who carefully monitor the market dynamics.
Bull and Bear Market Cycles: Bullish markets are marked by growing demand and investor optimism, while bearish markets experience price drops and investor caution. Both cycles influence overall market sentiment and opportunities for profit.
External Factors Affecting Crypto: Macroeconomic conditions, geopolitical events, and regulatory changes, including the rise of pro-crypto administrations, will play a significant role in shaping the market’s direction in 2025.
Institutional Influence and Security Challenges: The increasing dominance of institutional investors and concerns over security, including hacks and scams, could reshape the market landscape, adding both risk and potential growth.
Crypto Market Transition – Bull Run to Bear Market?
The year 2025 is upon us and has brought with it a certain degree of uncertainty as the crypto market enters a phase aptly called “consolidation” by the experts. Such a period is best known for its slew of opportunities and a multitude of hidden risks that lie in wait for the unwary investor who fails to see upcoming changes and adapt to them. As for those who keep an eye on the tectonic shifts altering the crypto market landscape, 2025 is poised to become a period of unprecedented gains.
With BTC, the main market driver, teetering precariously on the major $90,000 breakthrough point, market participants are holding their breaths to see whether 2025 will usher in a bullish or bearish period. Whatever the future holds, the crypto market is already solidifying its position worldwide in terms of adoption and capitalization, as major institutional investors and states are turning to cryptocurrencies as serious financial instruments.
In the given material, we shall explore the state of the crypto market in 2025, delve into the factors influencing its dynamics, skim through a range of predictions made by top experts in the field, as well as give a run-through over a history of cycles, and give answers to some of the most pressing questions investors have at the moment.
Bulls and Bears Explained
Everyone knows that financial markets go through bull and bear markets, which define periods of gains and losses, respectively. To best understand the situation currently holding sway over the crypto market, it is best to refresh our memories regarding what bull and bear markets actually are.
The Bullish Market
A bull market, also known as a bull run, is a market period that is defined by growing demand for a specific product. Since markets are governed by laws of supply and demand, during a bullish market, demand outstrips supply, driving prices for the demanded products up. Such periods are marked by heightened investor optimism and their willingness to take greater risks regarding certain assets in anticipation of making a profit by buying on “lows” and then selling on “highs”.
The investors who believe in taking risks are known as the bulls and their readiness to spend during market uptrends is called “market sentiment” – a crucial metric used to determine investment attractiveness and predict future price movements. Naturally, bull markets are not level and experience fluctuations. Such a period is best known for its heightened degree of volatility, resulting in sharp upward and downward movements for prices. Many investors, who are prone to panic, may misinterpret short downward movements for ends of bull cycles, disregarding a key feature of any market cycle – the long-term market analysis time frame.
Bullish markets are relatively easy to spot, since cycles indicating the end of a bearish phase start with events that arouse investor interest. These include new developments, stabilization of geopolitical situations, positive news events, adoption of investment-friendly regulation, new technology releases, and other factors that spur liquidity injections and promise profits.
The Bearish Market
In opposition to bullish markets, bearish cycles are known by a reverse situation, when supply outstrips demand, resulting in price drops, discounts, and a general deficit of liquidity. Such periods usually last longer than bullish markets, since investor sentiment is not easily recovered, especially considering that bearish periods usually bring about lulls in market activity, stall development in new product lines, and result in substantial losses of income for many market participants.
The investors who fuel bearish markets are known as the bears, since they adhere to pessimistic views regarding investment opportunities, believe in continued price drops, and generally enter a state of proverbial hibernation, retain their capital and refrain from investing. Still, some cunning investors take advantage of bearish markets and scoop up assets that they believe hold potential in terms of price increases during an inevitable bullish cycle, taking advantage of momentary price “lows”.
Bearish cycles are nearly impossible to predict, since they descend on the market suddenly as a result of unpredictable factors of external origin. These may include anything from worldwide pandemics and wars to investor psychology shifts or even panicky rumors. Historical analysis also indicates that a bull cycle comes to an end rather abruptly and results in a drastic, sharp price collapse across the board. The factors influencing the downtrend may be sudden and often unrelated to the market itself. Two of the best and most recent examples of sudden ends of bull cycles in the crypto market are the COVID-19 pandemic and the collapse of the FTX exchange.
No matter which state a market is in, it is imperative to remember that cycles repeat and their change is certain. Markets always go through cycles of growth, boom, leveling out, decline, and depression, which oscillate over time, bringing about both losses and opportunities for profit alike.
Current Market State
As the year 2025 commenced, the cryptocurrency market welcomed it facing a sharp downturn. Bitcoin, the market champion, started the year at a loss, dropping below the $90,000 mark, sending ripples of panic and massive losses across the entire market, resulting in a reversal of investor sentiment and the start of a consolidation phase.
BTC sidestepped from the $90,000 high and hit the low of $88,900 on January 13. As Bitfinex’s report stated, this situation became the result of an overall response on the part of investors to the predictions made for 2025 in terms of macroeconomic conditions and geopolitical situation scenarios. At the time of writing, Bitcoin was trading at $95,820, but the bears were maintaining their advantage, suppressing upward movement by applying pressure on the asset in their unwillingness to engage in active trading.
Source: CoinMarketCap
Analysis of the first week of 2025 indicates that the market experienced liquidity injections of up to $1 billion in the period between January 3 and 6, followed by losses of up to $718 million over January 8 and 10. Such events may have been influenced by the rise in US Treasury yields, which reached a 14-month high of 4.79%, and the publishing of the new Federal Reserve policy. Treasury yields are exerting pressure on Bitcoin by giving institutional investors more options for exiting the asset in favor of less volatile bonds, thus rebalancing their portfolios. The higher cost of borrowing also means that fewer traders will be willing to enter high-risk assets like Bitcoin – a speculative asset, further adding pressure on the cryptocurrency market as a whole.
Bitcoin’s continued resilience to the pressure on the part of the macroeconomic situation can be attributed to investors’ ongoing optimism regarding President-elect Donald Trump’s upcoming inauguration and his promises to adopt a pro-crypto stance. This, coupled with the phantom prospect of an end to the conflict in Eastern Europe, give investors sufficient confidence in the stabilization of Bitcoin’s price, thus influencing the entire crypto market. However, the seeming consolidation is still precarious, since ETF outflows are continuing, as is the slew of efforts undertaken by the outgoing US Administration to undermine Trump’s positions as a market redeemer and leave him a difficult legacy. The road ahead for Bitcoin and the crypto market at large is challenging and uncertain at best in light of these events.
In order to bring some manner of certainty to the market and maintain a balance of BTC price above the crucial support level of $90,000, the bulls must take action and reclaim higher levels above the $95,000 mark.
Source: Axel Adler on X
Heightened volatility is expected in the coming days as investors are poised to decide by their actions whether 2025 will start off with a bullish cycle, since the current situation looks more like the start of a bearish one.
Transition Factors
Among the factors that are likely to influence the transition of the market from one phase to the other are a mix of both external and internal market dynamics. New IRS regulation for crypto DeFi brokers is just one of the factors, followed closely by growing speculation regarding the creation of a federal Bitcoin reserve on Donald Trump’s orders, as well as the entry into office of the first-ever pro-crypto administration in the history of the United States.
The outright hostile stance taken by the last two US administrations towards cryptocurrencies has had a detrimental impact on the market as a whole, with outgoing chairman Gensler leading the onslaught. With his replacement as the head of the SEC, investors are expressing cautious optimism that 2025 may be the year for the establishment of a generalized set of regulations for all crypto market activities.
Transparency is a major factor influencing general market sentiment as well, since the US government, regardless of the administration in power, will strive to disclose any crypto-related financial operations. Whether this will be done through a forced debanking of crypto companies and exchanges, or through consensus, is yet to be seen. However, it is clear that there will be generalization of crypto operation transparency, so private coins like Monero and Ripple can start getting nervous.
The state of the global economy is vital for crypto adoption and market growth. There are plenty of signals indicating that many countries are making the shift towards crypto assets as both a means of transacting and reserve. Countries under sanctions are already resorting to digital assets for cross-border settlements, forcing the global economy to move towards de-dollarization and diversification of payment channels, as well as the consolidation of national currencies.
Geopolitics is in focus when the global economy is at stake, and 2025 is likely to be eventful, with investors eager to see both stability and volatility on this front. Unstable economic environments are ideal for cryptocurrencies to thrive as alternative investment instruments, giving bullish investors ample room for maneuver, especially in regions with failing national currencies. However, smooth trading is just as important, meaning that a peaceful global climate is imperative to ensure a healthy environment for crypto innovation and development, as well as safe transacting. Should geopolitical tensions continue in 2025, it would be reasonable to assume that investors will likely opt for safe-haven assets – gold, real estate, or government bonds.
Security and technological concerns still top the board of factors in crypto, since the number of hacks and breaches is only on the rise, with criminals resorting to ever more innovative technologies to advance their activities. The use of deepfakes, AI, and evolving phishing schemes of varying deviousness are the most pressing of concerns for crypto ecosystems, especially DeFi platforms and exchanges. In order for the market to live up to its expectations in 2025, security must be addressed alongside technological issues, such as scalability and mounting pressure from centralized market players, like states poised to launch CBDCs to counter crypto influence.
Lastly, the dominance of institutional players in the crypto market could bring about the end of decentralization as we know it. The frightening growth of crypto ETFs last year has paved the way for broad institutional entry into the market, resulting in a whopping $36 billion in investments in Bitcoin spot ETFs alone. The situation is therefore a two-sided coin. On the one hand, the predominance of institutional investors in the market could result in their dominance over crypto supply, leaving retail investors with virtually no Bitcoins left to trade, restricting them to altcoin trade. On the other hand, governments could intervene to regulate institutional involvement, which could result in a rapid outflow of liquidity and a subsequent market crash.
Overall, there is no certainty regarding what 2025 may hold for the crypto market, since too many external factors are at play simultaneously, with the geopolitical situation dominating market sentiment.
What the Experts Say
While external factors are positioned as objective facts, some experts are expressing varying views on what 2025 could hold for the crypto market. As is well known, market participants are heavily influenced by subjective factors, the expressions of so-called opinion leaders, Elon Musk being among the most obvious example. Below is a selection of some predictions made by experts regarding the state of the market in 2025.
Top crypto market analyst Axel Adler recently shared his view on Bitcoin’s positioning in 2025, stating that the asset is entering a consolidation phase, since its drawdown increased to 12%. This, in his opinion, underscores a predominance of short-term selling pressure, which basically means that a bearish market is nigh.
The experts at financial giant Fidelity state the following:
“We expect 2025 to be the year this (the market situation) changes for both acceptance and adoption. This is to say, we anticipate more nation-states, central banks, sovereign wealth funds, and government treasuries will look to establish strategic positions in bitcoin.”
The same experts point out Bhutan and El Salvador as illustrations for their opinion, noting “substantial returns…in a relatively short amount of time.”
Matthew Sigel of VanEck forecasts that Bitcoin will top $180,000. He believes that the influence of Bitcoin ETFs is playing a crucial role in this regard, as well as the cyclical nature of the asset’s price behavior in periods following the halving event.
Notorious crypto bulls Cathie Wood and Michael Saylor express their views that Bitcoin will cost millions in the coming few years, but not in 2025.
Respected market professional Peter L. Brandt revealed in his technical analysis that he found movements that could indicate an impending crash of Bitcoin’s price to $78,000, with imminent further decreases, or a sudden upward reversal shortly afterwards.
A horde of other experts are clamoring that there is no “crypto winter” looming, but there are signs of black swan events, reminiscent of the politically-connected FTX money laundering scheme. A fiat-connected crisis is the last thing the crypto market needs, considering its inextricable connection to real-world liquidity.
Experts from BlackRock recommend investors allocate 2% of their holdings to crypto. In short, they believe that crypto has a place in global finance, but not a dominating position.
Historical Market Analysis
Bull and bear cycles are part of crypto market history. Knowing them is a powerful boost for traders in their incessant search for insights and potential outlooks into the future of price dynamics. Given the extreme volatility of cryptocurrencies, it would be unjust to compare their price movements or cycles to traditional markets, where phases are expressed in decades. To best illustrate this, let us take a gander at the timeline of the most significant market cycle shifts in the history of crypto.
- 2008 – The birth of Bitcoin and its launch in 2009. This year marks the start of crypto market bull and bear cycle history, kicking off with a bullish phase that saw BTC soar from almost $0 to $150 between 2010 and 2013.
- 2011 – Bear cycle 1. This year saw the first ever slump of Bitcoin’s price, lasting from June 2011 to November 2011, marking a 93% drop. The ATH of $42.67 reached on June 8, 2011, was cut short by a black swan event – the hack of the Mt. Gox exchange, resulting in the loss of over 850,000 BTC. The event sent BTC down to $2.91 by November 18, 2011.
- 2013 – The next bear cycle, which lasted from December 2013 until August of 2015, leading to over 84% in price loss for BTC. The reason for the slump was the Silk Road disaster and the FBI’s investigation into its black market doings involving cryptocurrencies. The 630-day bear cycle toppled Bitcoin’s price from $1,653 to $255, and spelled doom for many early crypto startups.
- 2018 – The great crypto crash of 2018 saw Bitcoin lose 83% in value. The significance of this event is in the fact that by then the crypto market had already developed to a certain extent and was becoming mainstream, experiencing a conjunction with traditional finance. The reasons behind the crash lie in the ICO bubble of 2017 – a notorious period that tarnished the reputation of cryptocurrencies through the emergence of Ponzi schemes, rug-pull practices, dump and dump schemes, ICO scams, and many other malignant manifestations of human greed. This period is known as the first ever “crypto winter” – a time when virtually all market investor’s went into hibernation.
- 2020 – As the world set in to wait out the COVID-19 pandemic, cryptocurrencies exploded in popularity among the millions locked in their homes. New types of crypto games, DeFi platforms, NFTs and many other innovations emerged onto the scene, resulting in the phenomenal increase in crypto prices across the market. Many experts call the bullish period of 2020-2021 as the New Digital Era.
- 2022 – The next crypto winter. The collapse of FTX, the failures of Luna and TerraUSD signaled the end of a market-wide euphoria, sending shockwaves across the market. The catastrophic events followed another major external geopolitical factor – the start of a war in Eastern Europe – that virtually shackled a significant part of the crypto market in the throes of new waves of sanctions and complete financial uncertainty.
- – To present, the crypto market was experiencing a downturn, as the end of the Biden administration’s term was a longed-for event. A significant revival was noted in November of 2024, when Donald Trump won the US presidential elections, riding the wave of his reformist policies and optimistic promises to bring about stability to global politics and the crypto market in particular.
How to Navigate the Crypto Market?
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ChangeNOW Advantages:
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Strategies for the Current Market State
Since market participants and experts are currently evenly distributed between the bullish and bearish camps, it would be wise to prepare for the onset of a market downtrend in the state of a consolidation. We have compiled a list of FAQs that relate most to the current market situation.
- Should I buy Bitcoin in 2025?
Bitcoin is a highly volatile asset with a prohibitive entry price that hovers in the $94,000 region at the time of writing. Crypto enthusiasts are advised to invest only surplus funds into the asset after careful analysis of their holdings and the asset’s potential price movements based on historical data and in-depth technical analysis. It is not advised to use loaned funds to buy cryptocurrencies.
- Will there be a bear market in 2025?
The crypto market is extremely unpredictable and prone to sudden shocks from external factors. The current geopolitical and macroeconomic landscapes are in flux and lack both stability and certainty. Investors are encouraged to exercise caution and anticipate the onset of a bearish market by allocating to trading and investing only sums that they can afford to and are willing to risk.
- Will Bitcoin’s price affect altcoins?
It is very likely. Bitcoin’s price is a market driver and benchmark for virtually all other cryptocurrencies. Trading activity with BTC has a major influence on altcoin trading intensity and is directly proportional based on historical market data.
Should I enter the crypto market with credit funds to take advantage of a bullish market?
It is highly NOT recommended to use loaned funds to buy cryptocurrencies.
When “altszn?”
If BTC continues to rise in price beyond the $100,000 mark, altcoins are likely to follow. Bitcoin dominance falling below 40%, to signify altcoin dominance, is expected no less than in 3 years, according to David Siemer, the CEO of Wave Digital Assets.
- Where should I trade crypto in 2025?
Cryptocurrencies should be managed using only verified and reliable platforms. The ChangeNOW ecosystem offers some of the most user-friendly instruments for crypto exchange at the current market rates, and a range of highly secure systems to ensure that users’ funds are always kept safe.
As 2025 starts, we urge all traders to stay abreast of the latest in market news to avoid losses and spot opportunities. Always fo your own research before entery
