"Bear Market Definition" - Different interpretations! Bitcoin sideways trading tests patience

Bitcoin has recently fallen into a lull, but interesting disagreements have emerged in market opinions regarding what this correction actually signifies. Some say this is a typical characteristic of a bear market, while others believe it is just a normal adjustment within a bull market. Currently, BTC is hovering around $89,870, with minimal gains, seemingly waiting for a signal to appear.

After experiencing intense volatility earlier this year, Bitcoin has been consolidating in the $85,000 to $90,000 range for several weeks. Gerry O’Shea, Head of Global Market Insights at Hashdex, pointed out: “Although variables such as the upcoming US monetary policy shift or progress on Congress’s cryptocurrency legislation could influence the market in the coming weeks, at this stage, Bitcoin remains in a range-bound pattern.”

Jim Ferraioli, Head of Crypto Research and Strategy at Charles Schwab, provided a deeper perspective. He stated that Schwab has not set specific Bitcoin price targets, but from a macro perspective, this correction is actually an essential step toward the asset’s maturation.

Bear Market vs. Correction—What Does a 30% Drop Really Mean?

There is the greatest divergence of opinions regarding the “definition of a bear market.” Jim Ferraioli conducted an interesting historical review: “Looking back at the November 2022 lows, Bitcoin rose all the way to the $126,000 all-time high set in October last year, multiplying 8 times in three years. The market is now in a digestion phase, needing time to absorb this huge rally.”

But how should a “bear market” be defined? Jim Ferraioli provided an answer: “By traditional standards, Bitcoin is undoubtedly in a bear market. But considering Bitcoin’s high volatility, a 30% correction is not uncommon. This could simply be an adjustment within a bull market, rather than the start of a bear market.”

Will Reeves, CEO of fintech company Fold, offered a more straightforward judgment—this is purely a matter of supply and demand cycles: “Bitcoin is currently severely undervalued, and the market is waiting for selling pressure to subside and for a new wave of buying to step in.” This view suggests that the current range-bound consolidation might just be a buildup phase.

ETFs Take the Lead, Institutional Funds Still on the Sidelines

The market structure has quietly changed. In the months following its all-time high, on-chain activity significantly cooled down, replaced by ETF capital flows becoming the dominant force influencing prices.

Jim Ferraioli further analyzed: “With trading fees low, long-term holders taking profits, and Bitcoin balances on exchanges dropping to lows, the current market trend is entirely driven by ETF capital flows.” Although this structural shift makes investing in Bitcoin more accessible, it may also distort short-term market signals.

More critically, Jim Ferraioli pointed out an overlooked phenomenon: “The truly large institutional players haven’t fully entered the market yet. Once relevant legislation is enacted, it could push Bitcoin prices higher.” In other words, the market might still be waiting for larger capital inflows.

Adoption Rate Is the Biggest Variable

Hyunsu Jung, CEO of Hyperion DeFi, believes that Bitcoin’s narrative logic is changing: “As the ETF capital influx recedes at the start of the year, digital assets appear less attractive compared to other asset classes. Without a new wave of institutional funds or a shift in the overall economy (such as rate cuts), Bitcoin will remain in a range-bound pattern.”

Returning to the core question of the “definition of a bear market,” the market is actually driven by two key factors: one is the macroeconomic environment, such as a shift in Federal Reserve policy; the other is the breakthrough of adoption rates. Jim Ferraioli emphasized: “Bitcoin does have some correlation with US stocks, but it still has its own unique drivers—money supply, a deflationary supply growth mechanism, and most importantly, adoption rates. Whether adoption rates can break through remains the biggest question mark this year.”

Regarding whether we have entered a “crypto winter,” opinions still vary. But what is certain is that, amid ongoing debates over the bear market definition, Bitcoin’s range-bound consolidation may become the norm until that moment arrives.