My spidey sense tells me the bear market is over. Can intuition be trusted when it comes to investing? It would be more acceptable if we named this feeling an educated guess. I've checked crypto prices several times daily for the last five years. I may have gained some insights that have not yet risen to consciousness. On the other hand, I will still make my comments following the data in the market.
Yesterday's rapid decline and substantial rise were significant. This move allowed the Bitcoin price to rise above 37k again. More importantly, the Ethereum price rose above $2000. The $2000-2100 area served as resistance twice during the bear market. If the region in question turns into a support region, we can say that the bull market has started for Ethereum. In this case, it will be easier for other altcoins to overcome the resistance they encountered during the bear market. For example, Hive needs to overcome the 50-cent resistance so that we can declare that it has entered the bull market.
There are several reasons why I argue that the bear market is over. My most important reason is that the interest rate hike cycle in the USA has ended. No official announcement has been made on this issue, but futures pricing shows that the market has no doubts about this issue. At the end of October, consumer inflation in the USA was announced as 3.2%. Annual real interest of around 2% will have a sufficiently restrictive effect on price levels.
Reaching the end of the increase cycle helped eliminate the uncertainty about interest rates. Again, according to futures pricing, investors expect a 75 basis point interest rate cut in 2024. The first interest rate cut may occur in the summer. We have a concrete path ahead of us in terms of interest.
Total transaction volume in the crypto market in November doubled from previous months. We also see that the market is lively from the price movements of some altcoins. For example, the price of Ordi, the coin of ordinals produced on the Bitcoin network, increased seven times in one month. There are strong price movements on Thorchain and Solana. We have not witnessed such price movements in the previous phases of the bear market. The total market value of coins other than Bitcoin and Ethereum is called Total 3 on Tradingview. Total 3's weekly RSI exceeded 55 for the first time since the beginning of the bear season. So, this time, we are faced with a movement that goes beyond the bear market correction.
Two critical pieces of news about the crypto market emerged today. The SEC announced that it is postponing the decision on Bitcoin ETF approval. On the other hand, analysts state that the SEC will approve Bitcoin ETFs by January 6. Another critical piece of news of the day was the permission received by Commerzbank, one of Germany's most important banks, for digital asset custody services. Recently, the media has increased the number of news supporting optimistic scenarios. The news I briefly mentioned above is an example of this situation.
Technical indicators such as weekly RSI and 200-day averages show that most cryptocurrencies are upward. The probability of a "final scare" movement affecting altcoins is decreasing because there is no news to trigger a substantial sale. The recession expected in developed economies for two years did not occur. Despite long-term bond interest rates exceeding five percent, far-fetched ideas like Binance's insolvency were not realized. "Creative destruction" occurred, and the weak links fell to the ground. Those who resist the bear market that has been going on for two years are getting ready to receive their rewards.
TL;DR
I think the bear market is over. It's time for the bears to hibernate. The market will need them again in a few years to smooth out the excesses that would occur during the bull market. Corrections during increases will be sufficient to eliminate those who engage in leveraged transactions.
So, has the bull market started? The bull market has begun for Bitcoin and Ethereum. Big investors bought Bitcoin first. Now it's Ethereum's turn if the 2000 USD becomes a support level. Following Ethereum's rise, other altcoins may also rally. Some altcoins have started to muster, but the solid upward move has not spread throughout the market. For now, we must be satisfied with the leading indicators of the bull market.
Thank you for reading.
In the current situation, it seems to me that we are ending the bear market and entering the bull market.