The crypto market has long been defined by its cyclical nature—booming bull runs followed by prolonged bear markets. Historically, a crypto bear market lasts about one year on average, though some extend into two. This phase typically emerges when supply outweighs demand, triggering a sustained downward price movement across digital assets.
One of the most severe downturns occurred in 2022, marked by the collapse of FTX, once among the largest cryptocurrency exchanges by trading volume. A massive bank run led to its downfall, which in turn triggered a domino effect—toppling major hedge funds and lending protocols. That period represented one of the darkest chapters in crypto history, shaking investor confidence to its core.
But is another such downturn imminent today?
Understanding Bear Market Psychology
Recent price movements have sparked renewed debate: is the crypto market slipping back into bear territory? After Bitcoin (BTC) surged to an all-time high of $73,750 in March 2025, many assets have struggled to maintain momentum. Since then, prices have either consolidated, declined, or seen false breakouts—fueling speculation of an approaching bear cycle.
👉 Discover how market sentiment can shift before a major downturn—and how to stay ahead.
This correction came as a surprise, especially since it preceded the much-anticipated Bitcoin halving event—a historical precursor to bull markets. Prior to this, analysts widely expected prices to climb even higher post-halving. Yet, that optimism hasn’t materialized. Instead, BTC and many altcoins are exhibiting signs of stagnation or reversal.
To better understand where we stand, it’s helpful to examine the psychological stages of a market cycle.
The 14 Stages of Market Cycle Psychology
A widely referenced model from Quantified Strategies outlines 14 distinct emotional phases investors experience during market cycles. These include:
- Disbelief: Early recovery after a bear market; few believe in a real turnaround.
- Optimism: Gradual acceptance that prices may rise.
- Thrill: Momentum builds; fear of missing out (FOMO) begins.
- Euphoria: Peak excitement; irrational exuberance takes over.
- Anxiety & Complacency: Uncertainty creeps in; some exit positions while others hold blindly.
In early 2023, Bitcoin began consistent upward movement—marking what likely was the disbelief phase. The approval of spot Bitcoin ETFs in January 2025 likely triggered the thrill stage, with widespread calls to “buy the dip” and double down on BTC exposure.
By March 2025, as Bitcoin and meme coins like Dogecoin and Shiba Inu hit new highs, the market appeared to enter euphoria. However, the recent cooling suggests a transition into complacency or even anxiety—phases often preceding a bear market.
But does this mean a full-blown downturn is unavoidable?
Bitcoin Holders Signal Confidence Despite Altcoin Weakness
While sentiment may be cooling, on-chain data reveals strong resilience among long-term Bitcoin holders. According to Glassnode, the Bitcoin Long-Term Holder Sell-side Risk Ratio remains below the peak levels seen during the 2021 bull run. This indicates that seasoned investors are holding firm, avoiding large-scale profit-taking.
“An elevated percentage of Bitcoin network wealth is held by this investor cohort relative to previous cycle ATH breaks, which suggests there is a degree of investor patience on display, and waiting for higher prices.”
— Glassnode Insights
This behavior reflects strong conviction. Rather than panic-selling at minor corrections, long-term holders appear to be playing the long game—anticipating much higher valuations down the road.
However, concerns persist due to underperformance in key altcoins—especially Ethereum (ETH).
Unlike in 2021, when ETH swiftly followed BTC to new all-time highs after Bitcoin peaked, Ethereum has lagged significantly in 2025. Despite the launch of spot Ethereum ETFs—once seen as a potential catalyst—ETH trades at $2,657, nearly 45% below its all-time high.
Earlier predictions that ETH would reach $8,000–$10,000 have faded amid lackluster price action. Some interpret this divergence as a warning sign: if even Ethereum can’t break out, perhaps broader market strength is weakening.
Yet context matters. Both BTC and ETH recently underwent periods of distribution—where large investors gradually sell into strength—naturally leading to short-term corrections. This doesn’t necessarily signal a bear market, but rather a healthy rebalancing within an ongoing bull cycle.
Are Bears Gaining Ground? Key Metrics to Watch
Despite holder resilience, caution remains warranted. One critical metric offering insight is the Net Unrealized Profit/Loss (NUPL) index.
NUPL measures the aggregate profitability of all Bitcoin holders. A reading above 0 indicates most investors are in profit; below 0 means more are underwater. Rapid drops suggest profit-taking and weakening sentiment.
As of now, Bitcoin’s NUPL sits at 0.46—a level previously associated with significant pullbacks. In July 2025, a similar reading preceded a drop to $55,857. The last time NUPL hit this zone, BTC fell further to $42,576.
👉 See how top traders use NUPL and other on-chain signals to time market turns.
Grizzly, a pseudonymous analyst on CryptoQuant, warns:
“If the index continues its downward movement, it’s reasonable to anticipate that the bears could take full control of the market. In such a scenario, the price could drop to around $40,000.”
A fall below 0.40 would signal growing bearish dominance and could accelerate selling pressure.
Still, it's important to note that temporary dips in NUPL are common during bull markets. What differentiates a correction from a true bear market is sustained capitulation—and so far, that hasn’t emerged.
Frequently Asked Questions (FAQ)
Q: How long do crypto bear markets usually last?
A: On average, crypto bear markets last about one year, though some extend up to two years depending on macroeconomic conditions and investor sentiment.
Q: What defines a crypto bear market?
A: A bear market occurs when asset prices decline over an extended period due to supply exceeding demand. In crypto, this often follows speculative peaks and is marked by negative sentiment and reduced trading volume.
Q: Is Bitcoin entering a bear market in 2025?
A: Not necessarily. While prices have corrected since March 2025, key indicators like long-term holder behavior and on-chain fundamentals suggest resilience. The market may be cooling off rather than entering a full bear phase.
Q: Why is Ethereum underperforming despite ETF approval?
A: ETF approval boosted institutional interest, but market dynamics—including macro trends, regulatory uncertainty, and capital rotation toward BTC—have limited ETH’s upside momentum so far.
Q: Can you profit during a bear market?
A: Yes. Strategies like dollar-cost averaging (DCA), staking, yield farming, and shorting via derivatives allow investors to generate returns even in declining markets.
Q: What signals should I watch for a coming bear market?
A: Monitor NUPL trends, exchange inflows, whale accumulation/selling patterns, funding rates, and long-term holder behavior—all reliable on-chain indicators of shifting market phases.
The current crypto landscape presents mixed signals. While anxiety is rising and some metrics point toward increased risk, strong holder conviction and structural developments suggest the bull cycle may still have room to run.
Rather than fearing a bear market, investors should focus on data-driven decision-making. With tools like on-chain analytics and sentiment modeling becoming more accessible, staying informed is easier than ever.
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The narrative of an impending crash may be overstated—for now. The real story lies in patience, analysis, and preparation for whatever comes next.