Is the Cryptocurrency Bottom Near? How Long Will the Volatility Last?

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The cryptocurrency market has been navigating a prolonged period of uncertainty, with Bitcoin and Ethereum repeatedly dipping below key psychological levels of $20,000 and $1,000, respectively. This persistent downward pressure has sparked widespread debate: Has the crypto bear market bottomed out? If not, how much further can prices fall before stabilization begins?

To answer these pressing questions, we’ll explore macroeconomic drivers, historical market cycles, and key on-chain indicators—all while identifying signals that could confirm a sustainable market bottom.

Key Factors Behind the Current Bear Market

The primary catalyst behind this downturn traces back to central bank monetary policy, particularly the U.S. Federal Reserve’s aggressive interest rate hikes initiated in late 2021 to combat soaring inflation. When interest rates rise, capital becomes more expensive, prompting investors to exit riskier assets like cryptocurrencies and equities in favor of safer instruments such as bonds.

This macroeconomic shift has amplified selling across asset classes. Unlike previous cycles, Bitcoin now exhibits stronger correlation with traditional stock markets, largely due to increased institutional participation. Major financial players treat Bitcoin as a risk-on asset, trading it similarly to high-growth tech stocks. As a result, any recovery in crypto will likely follow—or at least coincide with—a stabilization in equity markets.

Other contributing factors include:

👉 Discover how market sentiment shifts can signal early signs of a turnaround.

Crucially, inflation remains the central variable. The Consumer Price Index (CPI) continues to influence Fed policy decisions. Recent data from mid-July 2025 indicates inflation remains stubbornly high, reinforcing expectations of further rate hikes. Notably, Fed officials like Raphael Bostic have emphasized the need for continued tightening, while economist Lawrence Summers warns that inflation may persist unless unemployment rises significantly—potentially to 6%.

Until inflation shows consistent decline, risk assets—including cryptocurrencies—are unlikely to sustain a meaningful rally.

Historical Patterns: When Do Bear Markets End?

Markets move in cycles, and history offers valuable insights into potential turning points. Let’s examine past Bitcoin bear markets to identify recurring patterns.

2011 Cycle

2013–2015 Cycle

2017–2018 Cycle

In each case, the market experienced an average price drop of 80–90% from peak to trough, with recovery taking between 12 to 18 months.

Applying this pattern to the current cycle—where Bitcoin peaked at nearly $69,000 in November 2021—an 80% decline would place the potential bottom between **$13,800 and $14,000**. Given that Bitcoin recently traded near $20,000, some analysts believe additional downside risk remains before a durable base forms.

Expert Outlook: Are We Close to the Bottom?

Several industry leaders and analysts offer nuanced perspectives on whether the worst is behind us.

Meltem Demirors, Chief Strategy Officer at CoinShares, emphasizes that Bitcoin historically falls 80–90% from all-time highs during bear markets. With Bitcoin down roughly 65% from its peak, she suggests more downside is possible. However, she notes strong support around $20,000 and believes Bitcoin is unlikely to fall below $14,000. She also highlights that long-term holders are accumulating during this phase, setting the stage for the next bull run—potentially within the next 24 months.

Adrien Treccani, CEO of Swiss-based Metaco, views the current crash as a necessary correction that will eliminate weaker players. He predicts a new phase for crypto startups within six months—one defined by resilience and innovation rather than speculation.

On-chain data from Glassnode reveals that May–June 2025 marked a critical transfer point where Bitcoin changed hands from weak hands (panic sellers) to strong hands (long-term believers). While this accumulation phase is encouraging, true bottom formation requires time and sustained low volatility.

Yassine Elmandjra, analyst at ARK Investment Management, points to two key metrics:

  1. Net Unrealized Profit/Loss (NUPL): Currently at -17%, indicating widespread unrealized losses. In prior cycles, NUPL reached -25% at major bottoms.
  2. 200-Week Moving Average: Bitcoin has now broken below this long-term support for the first time since 2015—historically a sign of a "generation bottom."

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Meanwhile, Mike Novogratz, founder of Galaxy Digital, argues that crypto is closer to a bottom than U.S. equities. He estimates fair value at ~$20,000 for Bitcoin and ~$1,000 for Ethereum. Still, he cautions against large-scale capital deployment until the Fed pauses or reverses its tightening cycle.

A Bloomberg MLIV Pulse survey of 950 investors found that 60% believe Bitcoin is more likely to drop to $10,000 than rebound to $30,000, underscoring prevailing bearish sentiment.

Frequently Asked Questions (FAQ)

Q: How do we know when the crypto market has truly bottomed?

A: A confirmed bottom typically features extreme fear sentiment, widespread capitulation (mass selling), on-chain accumulation by long-term holders, and stabilization below key moving averages like the 200-week MA. It’s rarely a single event but a process over weeks or months.

Q: Can Bitcoin recover without a stock market rebound?

A: Historically unlikely in the short term. Due to increased correlation with tech stocks and risk assets, Bitcoin tends to stabilize only after broader financial markets show signs of recovery—especially if driven by dovish central bank policies.

Q: What role does inflation play in crypto pricing?

A: High inflation leads to tighter monetary policy (rate hikes), which drains liquidity from speculative assets. Conversely, falling inflation may prompt central banks to pause or cut rates—injecting liquidity and boosting investor appetite for digital assets.

Q: Are altcoins doomed in this bear market?

A: Many weaker projects will likely fail. However, fundamentally strong blockchains with active development and real-world use cases—such as Ethereum—tend to survive and thrive in the next cycle.

Q: Should I buy now or wait longer?

A: Dollar-cost averaging (DCA) into positions during prolonged downturns reduces risk. Waiting for clearer macro signals—like a Fed pivot—can help avoid catching falling knives.

Final Thoughts: Patience and Preparation

While signs suggest we may be approaching a generational bottom, the path ahead remains uncertain. The confluence of high inflation, rising rates, and weak investor sentiment means volatility could persist into late 2025 or early 2026.

However, every major bull run in Bitcoin’s history has been preceded by intense pain and skepticism. Those who accumulate during this phase—with disciplined risk management—are often best positioned when confidence returns.

👉 Learn how smart investors navigate bear markets using strategic entry points.

The current environment isn’t just about survival—it’s about preparation. Whether you're watching on-chain metrics, macro trends, or expert sentiment, staying informed increases your edge when the tide finally turns.

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