Are we currently in a crypto bull market? The truth about Bitcoin's cyclical rise

As the largest digital asset by market capitalization worldwide, Bitcoin has experienced multiple distinct cycles of significant rise and fall since its inception in 2009. Each price surge is accompanied by unique market-driving factors, and understanding these patterns is crucial for investors to assess the current market conditions. Currently, many are asking: Are we in a crypto bull market? The answer may be more complex than it appears on the surface.

Definition and Characteristics of Bitcoin Bull Markets

A Bitcoin bull cycle is not merely about price increases but a sustained upward trend driven by multiple factors. This rise typically results from the convergence of several key events: halving cycles, increased mainstream adoption, improved policy environments, and institutional capital inflows.

A true bull market should exhibit several typical features: significant increase in trading volume, rising social media buzz, frequent on-chain activity, and high investor sentiment. From a technical perspective, an RSI (Relative Strength Index) above 70 generally indicates strong buying pressure, while crossovers of the 50-day and 200-day moving averages often signal trend reversals.

Historical Reflection: Four Major Bitcoin Bull Markets

2013: The First Breakout of Cryptocurrency

The first genuine bull market occurred in 2013. Bitcoin surged from approximately $145 in May to $1,200 in December, a 730% increase. During this period, Bitcoin was just entering public consciousness. The Cyprus banking crisis served as an unexpected catalyst—local depositors faced asset freezes, prompting some to seek alternative assets for wealth preservation. Bitcoin’s decentralized nature gained attention.

However, this bull run ended abruptly. In early 2014, the most heavily trafficked exchange suffered a security breach, resulting in significant user asset losses, and Bitcoin’s price plummeted below $300, a decline of over 75%. This event exposed the fragility of early crypto ecosystems.

2017: Retail Investors’ Frenzy

The 2017 bull market was even more spectacular. Bitcoin rose from around $1,000 at the start of the year to nearly $20,000 in December, a 1,900% increase. During this time, the ICO (Initial Coin Offering) boom swept the industry, with thousands of new projects raising funds via token issuance, attracting a flood of retail investors.

Media played a significant role in fueling the hype. Every price rally triggered news coverage, which in turn amplified FOMO (Fear of Missing Out). Exchange platforms also facilitated this trend—more user-friendly and accessible platforms made it easy for ordinary people to buy Bitcoin.

But the euphoria was short-lived. By 2018, regulators began to intervene. China shut down domestic exchanges and banned ICO fundraising, while the US SEC expressed concerns. Over the next 12 months, Bitcoin’s price fell by 84%, from nearly $20,000 to around $3,200. This correction demonstrated the market’s high volatility.

2020-2021: The Institutional Era Begins

The rise from 2020 to 2021 was fundamentally different. Bitcoin climbed from about $8,000 at the start of 2020 to $64,000 in April 2021, a 700% increase. This surge was driven by institutional participation.

Major publicly traded companies began openly buying Bitcoin. MicroStrategy led the way, holding over 125,000 BTC at one point. Tesla, Square, and other tech giants announced purchases as well. These actions sent a clear signal: Bitcoin was evolving from a niche experiment into a mainstream financial asset.

Simultaneously, the narrative of “digital gold” gained traction. Facing global central banks’ liquidity injections and rising inflation expectations, institutional investors viewed Bitcoin as a hedge. Bitcoin’s fixed supply cap (21 million coins) added to its appeal, akin to precious metals.

This period also saw the maturing of the crypto derivatives market. The launch of Bitcoin futures and multiple Bitcoin ETFs further lowered barriers for institutional participation.

2024-2025: ETF Approvals and New Paradigms

The current situation is particularly notable. Bitcoin has fallen from a peak of $93,000 in November to the current $87.78K, but this is not a sign of a bull market ending—rather, a normal market correction.

The game-changer is the approval of the US spot Bitcoin ETF in January 2024. This decision is as significant as Bitcoin’s own creation. Suddenly, traditional financial institutions can invest in Bitcoin through regulated channels, eliminating the need to handle wallets and private keys.

Data speaks volumes. Since approval through November this year, Bitcoin spot ETFs have attracted over $4.5 billion in net inflows. The world’s largest asset manager, BlackRock, holds 467,000 BTC through its IBIT fund. This accounts for approximately 2.3% of Bitcoin’s circulating supply being locked within traditional finance.

Equally important is the Bitcoin halving event in April. This event occurs roughly every four years, halving the block reward for miners and reducing new Bitcoin supply. Historical data shows significant price increases within 12-18 months after each halving: +5,200% after 2012, +315% after 2016, and +230% after 2020.

How to Determine if We Are Truly in a Bull Market

Instead of focusing solely on absolute price levels, consider the following indicators:

On-chain Data: Rising wallet activity indicates increased trading participation. Continuous decline in exchange reserves suggests accumulation rather than selling. High net inflows of stablecoins into exchanges imply ample liquidity.

Market Structure: The ratio of retail to institutional investment is shifting. Previously, retail FOMO drove bull markets; now, institutional demand sustains them. This can lead to more stability but may also limit short-term explosive growth.

Policy and Narrative: US policymakers are proposing to include Bitcoin in national strategic reserves. Senator Cynthia Lummis introduced the “2024 Bitcoin Act,” recommending the Treasury acquire 1 million BTC over five years. Countries like Bhutan and El Salvador have incorporated Bitcoin into national assets. These developments are redefining Bitcoin’s status.

Deep Analysis of the Current Market State

Price correction from $93,000 to $87.78K has led some to believe the bull market has ended. However, this view oversimplifies the situation. Several opposing forces are at play:

Bullish Factors:

• Continued ETF inflows (albeit at a slower pace)
• Growing government-level adoption trends
• Potential network upgrades (e.g., OP_CAT activation) expanding functionality
• Less than three years until the next halving

Bearish or Constraining Factors:

• High interest rates putting pressure on risk assets
• Ongoing regulatory uncertainties
• ESG concerns over mining energy consumption
• Capital flows diverted to competing cryptocurrencies

Will the Bull Market Continue?

Historically, Bitcoin’s cycles tend to follow a four-year pattern, with halving events acting as the cycle’s metronome. The 2024 halving has already occurred, and based on historical trends, the next 12-18 months are likely to be relatively strong.

However, “relatively strong” does not mean continuous upward movement. The market may oscillate around $100,000 before experiencing larger corrections. This is Bitcoin’s normal cycle—rapid rises followed by sharp declines.

Preparing for the Next Cycle

If you believe in the long-term trend, consider the following:

Educate Yourself: Understand that Bitcoin is not just about price movements but also its technology, economic model, and macroeconomic context. Historical patterns offer guidance, but the future will not exactly repeat.

Choose Appropriate Tools: Whether through direct holdings, ETFs, or derivatives, different instruments suit different investors. Beginners should start with the simplest options.

Develop a Risk Management Plan: Set stop-loss points, determine position sizes, and define entry/exit conditions. These rules can protect your portfolio amid extreme volatility.

Monitor Key Events: Keep an eye on Federal Reserve policies, global economic conditions, Bitcoin network upgrades, and government adoption trends. These often serve as leading indicators for price movements.

Avoid Emotional Decisions: The biggest mistake in a bull market is chasing highs. Buying when everyone is optimistic can be the riskiest moment. Conversely, panic selling during downturns is equally dangerous.

Conclusion: Cycles Are Still in Motion

We are indeed in a crypto bull market, but its nature differs from previous cycles. This is not a retail speculative frenzy but the beginning of the integration of traditional finance with digital assets. Bitcoin is moving from the fringes toward mainstream acceptance, a process filled with both opportunities and risks.

The current correction may be just a brief pause within this cycle. The real test will come next year—when we will see how much institutional investment can push Bitcoin higher and what role retail investors will play.

In any case, understanding cycles, respecting risks, and continuous learning are the only long-term survival secrets in this market.