Bitcoin Enters Bear Market: Historical Trends Indicate Next Move
Bitcoin has recently entered bear market territory for the seventh time in five years, with its price declining significantly. The cryptocurrency experienced a rise after the election of President Donald Trump, peaking near $126,000 in October 2025. However, it has since fallen by 27%, bringing its price down to $92,000 as of November 18, marking a significant drop from recent highs.
Understanding Bitcoin’s Bear Market
A bear market is characterized by a decline of at least 20% from a recent peak. Bitcoin hit this threshold on November 14, 2025, when it fell more than 20% from an earlier high observed on October 7. Economic uncertainty, especially regarding monetary policy, has prompted a shift away from risk assets, including cryptocurrencies.
Economic Factors Influencing Bitcoin
- The U.S. jobs market weakened over the summer.
- Inflation has risen, prompting concerns about Federal Reserve interest rate decisions.
- The Fed may choose to maintain interest rates in December, affecting investor sentiment.
These factors have contributed to Bitcoin’s latest downturn. Furthermore, history indicates that Bitcoin may struggle to regain upward momentum in the near future.
Historical Performance of Bitcoin in Bear Markets
Analysis of historical trends reveals that Bitcoin’s returns post-bear market are often muted:
- Average return of 6% over the next six months.
- Average return of just 1% over the following year.
- Average duration to reach a new record high: over 218 days.
Although past performance is not a guarantee of future results, it suggests that Bitcoin may trade sideways over the upcoming year.
Investment Potential and Institutional Adoption
The investment thesis for Bitcoin remains strong despite recent challenges. The approval of spot Bitcoin ETFs and a supportive regulatory environment have bolstered demand. Notably, the holdings of Bitcoin on public and private company balance sheets have increased significantly in the past year.
- Holdings more than doubled over the past year.
- Increased by 150% since January 2024, following the SEC’s approval of spot Bitcoin ETFs.
Institutional interest is rising as well. Data from Form 13F filings indicate that the number of large asset managers with Bitcoin positions has more than doubled in the past year, with a 154% increase in shares held.
Conclusion
Investor caution is essential in the current environment. Bitcoin remains volatile and may face further challenges if economic conditions worsen. As with any investment, only allocate what you can afford to lose, especially in light of potential market fluctuations.
