When Will Bitcoin’s Bear Market Bottom Occur and How Low Could BTC Fall?

Bitcoin’s historical price cycles, traditionally linked to its halving events every four years, have long shaped expectations around bear market durations and lows. However, recent developments—including increased institutional adoption, evolving regulatory scrutiny, and new financial products—complicate this framework, raising questions about the timing and depth of future bear market bottoms.

What happened

Bitcoin has exhibited a recurring roughly four-year cycle historically, with bear markets typically lasting between 12 to 18 months following each halving event. These halvings reduce the rate at which new bitcoins enter circulation, traditionally acting as a supply shock that influences price. This cyclical pattern has been a foundational model for market participants and analysts alike.

Since 2020, institutional adoption of Bitcoin has accelerated significantly. Entities such as Grayscale have filed disclosures with the U.S. Securities and Exchange Commission (SEC) and launched regulated investment products like the Grayscale Bitcoin Trust (GBTC), providing institutional investors with alternative means of gaining exposure to BTC without direct ownership.

Regulatory scrutiny has intensified during this period, especially regarding spot Bitcoin exchange-traded funds (ETFs) in the United States. Multiple issuers, including VanEck, ProShares, and Valkyrie, have submitted filings seeking SEC approval for spot BTC ETFs, but as of now, no such product has been approved. In contrast, futures-based Bitcoin ETFs, such as the ProShares Bitcoin Strategy ETF (ticker: BITO) launched in 2021, offer exposure through derivatives rather than direct BTC holdings.

Recent Bitcoin price behavior has shown departures from the traditional four-year cycle’s timing and amplitude. Analysis by CoinDesk indicates that broader macroeconomic factors—such as Federal Reserve interest rate policies and inflation concerns—alongside regulatory developments, have exerted significant influence on BTC price dynamics. This suggests that the classical cycle model may no longer suffice as a standalone predictive tool.

Why this matters

The evolving landscape of Bitcoin markets has structural implications that extend beyond price predictions. Increased institutional participation alters demand dynamics and liquidity profiles, potentially dampening or amplifying price swings relative to historical patterns. The entrance of regulated investment vehicles like GBTC and futures ETFs introduces new mechanisms for price discovery and hedging, which may decouple BTC price movements from halving-driven supply shocks.

Regulatory developments, particularly the unresolved status of spot Bitcoin ETFs in the U.S., add layers of uncertainty. Delays or denials in approvals can distort market expectations and price behavior, complicating the application of traditional cycle theories. Moreover, macro-financial variables—such as monetary policy shifts—now play a more dominant role in shaping Bitcoin’s price cycles, underscoring the need for models that integrate these broader economic influences alongside on-chain metrics.

Together, these factors challenge the adequacy of the classic four-year cycle framework and highlight the necessity for multi-factor models. Such models might incorporate on-chain data (e.g., hashrate trends, miner activity), institutional flows (including ETF inflows and outflows), and macroeconomic indicators (interest rates, inflation) to better anticipate bear market bottoms and price floors.

What remains unclear

Despite these insights, significant uncertainties persist. The precise quantification and integration of institutional flows into predictive models remain limited due to incomplete or delayed data on ETF activity and other institutional transactions. The causal relationships between macroeconomic factors and Bitcoin price cycles are complex and not yet fully understood, complicating efforts to isolate their individual effects.

Regulatory outcomes, especially regarding spot Bitcoin ETF approvals in the U.S., are inherently unpredictable and subject to political and legal developments. Their future impact on market dynamics and cycle behavior cannot be reliably forecasted at this time. Additionally, while alternative metrics such as miner capitulation and exchange reserve changes have been proposed as potential early indicators of bear market bottoms, their effectiveness relative to traditional halving-based timing has not been conclusively demonstrated.

Finally, existing models remain largely conceptual or exploratory, lacking proven predictive accuracy. The influence of exogenous shocks—such as geopolitical events or technological shifts—further complicates modeling efforts and falls outside the scope of current cycle theories.

What to watch next

• Regulatory decisions on spot Bitcoin ETF applications by issuers like VanEck, ProShares, and Valkyrie, which could materially affect market structure and investor access.
• Data releases related to institutional flows, including ETF inflows and outflows, which may help clarify the role of institutional demand in price cycles.
• Macro-financial indicators, particularly Federal Reserve policy announcements and inflation reports, which continue to influence BTC price behavior.
• Developments in alternative on-chain metrics such as miner capitulation rates and exchange reserve levels, which could provide earlier signals of market bottoms.
• Performance and market impact of futures-based Bitcoin ETFs, including their role in price discovery and hedging relative to spot BTC markets.

The traditional Bitcoin four-year cycle remains a useful historical reference but is increasingly insufficient to explain or predict bear market bottoms in isolation. Institutional adoption, regulatory uncertainty, and macroeconomic forces have introduced new complexities that require integrated and multi-dimensional analytical approaches. As these factors continue to evolve, market participants and observers must navigate a landscape marked by both emerging data and persistent unknowns.

Source: https://cryptopotato.com/bitcoin-bear-market-bottom-when-and-how-low-will-btc-go/. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.