Bitcoin Rebounds 33% But Bear Market Not Over?…$82,300 is the Real Test

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An analysis suggests that while Bitcoin (BTC) has rebounded over 30% from its July low, it's still too early to conclude that the bear market is over. The recovery of the 200-day Simple Moving Average (SMA) and the resumption of institutional demand are positive, but the slowdown in spot demand from U.S. investors, profit-taking, and the Federal Reserve's renewed interest rate hikes combine to make breaking above $82,300 a key test to confirm entry into a new bull market.

According to investment media outlet FXStreet on September 18 (local time), Bitcoin fell to $57,800 in July, then rebounded approximately 33%, rising for two consecutive months in July and August, but is still about 40% below its all-time high. The current bear cycle, based on Bitcoin trading below the 200-day SMA for more than 30 days, has lasted approximately 290 days, making it the fourth longest out of six cycles recorded since 2014. The drop from the cycle's peak to the July low was 51.20%, which is smaller than the 83.60% drop during the 2018-2019 bear market and similar to the 52.90% drop during the mid-2021 correction.

The direct catalyst for the rebound was identified as changes in the U.S. Treasury's liquidity supply. The Treasury announced in mid-August that it would at least double the size of some bond buybacks, which the media evaluated as a structural liquidity change that could affect risk assets. Bitcoin rose approximately 25% in August, reaching $83,300. Institutional demand also revived. According to SoSoValue, U.S. Bitcoin spot ETFs recorded a net inflow of $3.52 billion in August, marking the highest this year, and continued a slight net inflow trend in September.

Strategy also resumed Bitcoin purchases. The company bought 4,603 Bitcoins for approximately $370 million between August 24-30, with an average purchase price of $80,318. This increased its total holdings to 845,050 Bitcoins. In September, however, macroeconomic and regulatory uncertainties re-emerged. The U.S. crypto market structure bill, the Clarity Act, failed to secure the 60 votes needed for cloture in a Senate procedural vote on September 15, recording 49-50. The Fed, the next day, raised its benchmark interest rate by 0.25 percentage points to 3.75-4.00%. The fact that 16 out of 18 Fed committee members projected at least one more rate hike this year was also cited as a factor that could burden liquidity.

On-chain indicators also show mixed bullish and cautionary signals. CryptoQuant's Bull Score remains in the bullish zone at approximately 70, but the August rally stalled below $82,300, where the 365-day moving average is located. Apparent spot demand has contracted again, and the Coinbase Premium has turned negative, indicating weakened demand from U.S. investors. Furthermore, with increased profit-taking by holders after the August rise, there's a possibility of sideways movement until strong spot demand returns. CryptoQuant assessed this not as a confirmed trend reversal, but as a 'cooling within a bullish trend.'

Ultimately, $82,300 is considered the key price level to determine whether the bear market has ended. While Bitcoin's recovery of the 200-day SMA and the revival of institutional demand from Bitcoin spot ETFs and Strategy support improvements in market structure, factors such as slowing spot demand, profit-taking, and renewed interest rate hikes limit further upside. FXStreet stated that a sustained breakthrough and consolidation above $82,300, along with a recovery in spot demand and institutional capital inflows, are needed to more clearly confirm a new bull market phase, assessing the current situation as 'a bullish recovery requiring further confirmation' rather than the end of a bear market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*