History suggests 365 days to a Bitcoin bottom – but this cycle is rewriting the script
Bitcoin has spent the last month under heavy pressure, losing roughly 29% from its recent highs and rekindling an old debate: is this the beginning of a prolonged bear market, or are we already approaching the end of the downturn?
On Tuesday, the largest cryptocurrency slipped more than 2% to around $67,000, moving in tandem with a broader wave of risk aversion as U.S. markets reopened after the Presidents’ Day break. The weakness in crypto did not happen in isolation: it coincided with renewed selling in high-growth tech and software names, where investors are still trying to reprice the impact of AI, higher-for-longer rates, and shifting competitive dynamics.
The Nasdaq-100 lagged the broader equity market, easing about 0.3% in early New York trading, while the iShares Expanded Tech-Software Sector ETF sank more than 2.7%. That software-focused vehicle has now fallen in 11 of the past 15 sessions, leaving it almost 25% lower for the year. Under the surface, equity markets were anything but calm: headline indices were roughly flat, yet sector rotations were sharp. Financials finally bounced after a stretch of sustained weakness, whereas defensive consumer staples trailed.
One corner of the market stood out for its resilience: travel and leisure. Norwegian Cruise Line Holdings jumped 11% after Elliott Investment Management revealed that it had built a stake above 10% and intended to push for strategic changes following years of underperformance. The optimism spread across the sector, lifting Carnival by about 4% and Royal Caribbean by roughly 3%. Airbnb extended the momentum from its recent earnings, adding 3.7%, while Southwest Airlines rallied more than 6% after fresh analyst upgrades.
That divergence – weakness in speculative tech alongside strength in selected cyclical names – sets an important backdrop for Bitcoin’s slide. Crypto still trades as a high-beta risk asset in many macro portfolios, so when investors step back from aggressive growth stories, they often reduce digital-asset exposure as well. Yet despite the recent 29% pullback, some market watchers argue that Bitcoin may already be closer to the end of this corrective phase than the beginning.
What past Bitcoin bear markets tell us
Analysts often look to previous cycles to frame expectations. Trader Altcoin Sherpa highlights two major historical precedents: the 2017-2018 and 2021-2022 bear markets.
In both of those periods:
– Bitcoin ultimately suffered peak-to-trough drawdowns in the 75-85% range.
– It took roughly one year from the all‑time high to the final bottom.
– The downtrend ended with a violent “capitulation” event, where price collapsed rapidly in a matter of weeks.
The pattern is familiar to long‑time observers. In late 2018, Bitcoin clung to the $6,000 level for months before suddenly breaking down to near $3,000 – a drop that flushed out leveraged longs, forced miners and speculators to sell, and set the stage for a long accumulation phase. The 2022 bottom played out in a similar fashion, with the collapse of FTX and related contagion driving a final wave of panic selling.
After each of these washouts, the market spent several months moving sideways in a wide range. Volumes dried up, volatility declined, and the crowd lost interest – classic signs of accumulation, as more patient, long‑term buyers quietly built positions from weaker hands.
This historical template would suggest that, if a similar pattern repeated, a new all‑time high would be followed by about 365 days of grinding lower, culminating in a deep crash and a long, boring base.
But many argue this cycle is materially different.
Why this Bitcoin cycle may break the “365‑day” rule
Altcoin Sherpa and a growing group of analysts believe that the 2024-2025 cycle is structurally unlike prior boom‑bust phases, for several reasons.
1. A slower, more mature rally
Instead of the near-vertical rises seen in previous cycles, the latest Bitcoin advance was comparatively slower and more consolidation-heavy. Price spent extended periods ranging within zones like $50,000-$70,000, pausing to absorb supply rather than shooting straight up and then collapsing. This type of grind can reduce the amount of “hot money” entering at the top and may limit the severity of the subsequent decline.
2. The role of spot ETFs and institutional demand
Unlike in 2017 or even 2021, Bitcoin now has a deepening layer of institutional infrastructure. Spot exchange-traded products have made it easier for asset managers, family offices, and traditional investors to gain exposure within regulated wrappers. That does not make Bitcoin immune to large drawdowns, but it can create a more stable bid underneath the market, especially in widely watched price zones.
If large, long‑term allocators continue to treat dips as opportunities to rebalance into Bitcoin, the asset may be less prone to the type of total capitulation that previously marked cycle lows.
3. Less speculative excess in altcoins
Another difference is the state of the broader crypto complex. Earlier in the cycle, many high‑risk altcoins already saw brutal corrections, wiping out much of the speculative froth. This “cleansing” process, which often occurs later in prior cycles, has in some areas already taken place. With many marginal projects de‑levered or abandoned, there is simply less forced selling left to cascade into Bitcoin.
4. Stronger structural support zones
Bitcoin now has well‑tracked support regions between roughly $50,000 and $70,000 – zones where large amounts of trading volume and investor interest have historically clustered. These levels are not unbreakable, but they can act as demand areas where buyers step in more aggressively than in past cycles when fair‑value anchors were much harder to identify.
Has capitulation already happened?
Sherpa goes a step further and argues that the market may have already gone through a de‑facto capitulation phase. In his view, the sharp drop from around the six‑figure region down to approximately $60,000 functioned as that emotional breaking point for many participants, even if it did not match the 80% drawdowns of the past.
“I believe that Bitcoin has already capitulated with that big move from 100k to 60k,” he says, framing that decline as the moment when late buyers and over‑leveraged traders were flushed out. From this perspective, the current environment is less about bracing for another crash and more about recognizing a transition into a different part of the cycle.
“I believe we are now in the accumulation phase of the cycle,” he adds. “Accumulation can last anywhere from a few weeks to several months.”
If this interpretation is correct, the key risk is no longer an imminent waterfall move, but rather the patience required to sit through a choppy, sideways market in which price repeatedly tests investor conviction.
What an accumulation phase typically looks like
Historically, accumulation phases in Bitcoin share several recognizable traits:
– Range-bound price action: The asset oscillates within a wide band, frustrating both bulls and bears. Breakouts often fail, and breakdowns are quickly bought.
– Falling volatility: Daily swings become less extreme as speculative interest fades and only more determined participants remain active.
– Lower trading volumes: With fewer short‑term traders, turnover declines compared with the manic peaks of the bull run.
– Bearish sentiment on social channels: Engagement metrics fall, searches decline, and the narrative shifts from euphoria to indifference or pessimism.
From a strategic standpoint, this environment tends to reward dollar‑cost averaging and long‑term positioning more than short‑term momentum strategies. However, it also demands robust risk management, as range bottoms can still be broken if macro conditions or crypto‑specific shocks deteriorate significantly.
Macro factors that could shorten – or extend – the downturn
Whether this bear phase proves shorter than the historical 365‑day average will likely depend not only on crypto‑native dynamics, but also on the broader macro environment.
– Interest rates and central bank policy: Expectations for multiple rate cuts have been fluctuating. Dovish shifts can support risk assets, including Bitcoin, by lowering discount rates and encouraging investors to seek higher‑beta exposures. Conversely, persistent inflation or hawkish rhetoric could prolong risk aversion.
– Equity market health: Persistent weakness in high‑growth tech and software signals caution around long‑duration assets. If equities stabilize and leadership broadens beyond a narrow group of AI‑related names, Bitcoin may benefit from renewed appetite for risk.
– Regulatory developments: Clearer rules and constructive supervision, especially in major jurisdictions, can solidify institutional participation. Conversely, aggressive crackdowns or restrictive frameworks could dampen flows and extend consolidation.
In the current environment, with travel and financial stocks showing pockets of strength while software and some tech names stumble, investors are selectively rotating rather than fleeing risk altogether. That nuanced picture may support the thesis of a corrective phase within a broader uptrend rather than a full‑blown, multi‑year winter.
Key levels and scenarios to watch
For traders and longer‑term investors, the path forward can be thought of in several scenarios:
1. Shallow, shortened bear market
Bitcoin stabilizes above major support bands in the $50,000-$60,000 region, volatility compresses, and spot ETF inflows gradually rebuild. Price may spend months chopping sideways before resolving higher as macro conditions ease.
2. Classic 365‑day grind
The asset continues to trace a familiar pattern, with lower highs and lower lows stretching over roughly a year from the peak. A final, sharp capitulation – potentially triggered by a macro shock or major crypto event – would mark the ultimate bottom, followed by a longer base.
3. Deeper structural break
A combination of aggressive regulation, macro stress, and crypto‑native failures (such as major protocol hacks or insolvencies) could force Bitcoin to retest far lower levels, challenging the idea that institutional flows can fully cushion the downside.
Which path unfolds will depend on the interplay of these forces. For now, the market appears to be oscillating between the first two scenarios, with the balance tilting toward the idea of a shorter, more muted bear phase compared with previous brutal cycles.
How investors are adapting their strategies
In response to this uncertainty, different types of market participants are adjusting their approach:
– Long‑term holders are generally treating the current weakness as a chance to add to positions, using systematic buying plans rather than trying to call the exact bottom.
– Trend‑following traders are reducing position size or shortening their time horizons, as choppy price action makes sustained momentum trades less reliable.
– Institutional allocators are increasingly integrating Bitcoin into diversified portfolios with risk‑budgeting frameworks, which can turn sharp pullbacks into rebalance triggers rather than existential crises.
For all of these groups, the central challenge is the same: balancing the historical precedent of deep, prolonged drawdowns with the evidence that Bitcoin’s market structure is evolving.
Is the bear market close to ending?
The answer may hinge less on a calendar count from the last all‑time high and more on whether the conditions that drove past 75-85% crashes still apply. In earlier cycles, Bitcoin was dominated by retail speculation, thin liquidity, and opaque offshore venues. Today, while speculation and leverage have not disappeared, they sit atop a thicker layer of institutional adoption, regulated products, and better-understood on‑chain behavior.
That does not eliminate the possibility of steep drops – Bitcoin remains a highly volatile asset – but it does support the argument that this cycle may not need a full 365 days of pain to reset.
If the current phase is indeed accumulation, investors may find that the most difficult part of this cycle is not surviving a dramatic collapse, but maintaining conviction through a long, grinding stretch of sideways markets where the real opportunity quietly shifts to those willing to think in years rather than weeks.
In other words, history still offers a useful guide – but this time, the script might not run all the way to the final page.