Where is the Bottom in the Current Bear Market? (May 2022)

Bitcoin has been “sentenced to death” hundreds of times over the past 13 years. It has gone through 7 major bear markets for various reasons. Each time, it fell hard, but always came back much HIGHER, always.

Why is this time different?

You will read about what happened to these 7 major bear markets

• How bad were they?
• What caused them?
• How does the current bear market compare to them?

Bear 1: Jan 2012 — Jul 2012

• Duration: 185 days
• Decline: -40% ($7.1 to $4.2)

Causes:

• Major exchanges got hacked followed by shutdowns
• 50k $BTC was stolen.

Bear 2: Aug 2012 — Dec 2012

• Duration: 111 days
• Decline: -37% ($13.4 to $8.4)

Causes:

• Several lawsuits were filed over major exchanges

Bear 3: Nov 2013 — Jan 2015

• Duration: 415 days
• Decline: -83% ($1,149 to $197.2)

Causes:

• Silk Road, the 1st Bitcoin black market, was shut down by FBI. 26k Bitcoin was seized.
• China ban

Bear 4: Dec 2017 — Feb 2019

• Duration: 419 days
• Decline: -79% ($19,114 to $3,399)

Causes:

• Pull back from a massive bull run
• Korea ban
• Facebook, Google, Twitter ban

Bear 5: Jun 2019 — Mar 2020

• Duration: 256 days
• Decline: -57% ($13,016 to $4,971)

Causes:

• Covid

P.s. Setting aside the Covid impact, this is technically a quiet period.

Bear 6: Apr 2021 — Jul 2021

• Duration: 96 days
• Decline: -53% ($63,504 to $30,400)

Causes:

• Bitcoin energy consumption concern
• China ban, again

Bear 7: Nov 2021 — Now

• Duration: 196 days
• Decline: -53% ($64,949 to $30,591)

Causes:

• Inflation & rate hikes
• Ukraine-Russia war

Key takeaways

• Hacks & bans are the most popular bear makers
• Gov. bans are the biggest killer, causing ~71.7% drawdown
• This is the 1st time in history that crypto suffered this much from economic factors.

How bad is the current bear market?

Which one is worse, economic factors vs. govt. bans?

Definitely the govt. bans. Bans shut down the $ inflow to crypto, while the other is just slowing it down. Plus, the economy always goes up in the long run.

So we are not that bad.

How far we are from the worst-case scenario (govt. ban level)?

Worst case, $BTC falls another 18.7% (i.e. 71.7% — 53%), to $24k.

But this is absolutely the worst case, and I DO NOT think we will get there this round UNLESS US/China enforce a ban/regulation again.

A side note on TA

Interestingly, the chart tells a very similar answer too.

• We are currently at the ~$30k support level
• The next level down is at ~$24k
• That head and shoulder is a BEARISH sign, saying we MAY go lower.

Again, this is the worst scenario imo. The probability is low, and only happen if we face another ban from US or China.

TL; DR

• Govt. bans are the biggest killer in the crypto history
• The current bear market is considered not that bad
• I’m bullish but we should get prepared for the worst case
• Worst case: $BTC falls to $24k (unlikely imo)
• It could happen if we see another ban