The crypto bull run may be over as Bitcoin, altcoins, and the Fear & Greed Index slip to their lowest levels in months.
Summary
- There are signs that the crypto bull run has ended as Bitcoin crashes.
- The Crypto Fear and Greed Index has plunged to 26.
- Some key catalysts may lead to a crypto rebound in the coming weeks or months.
Bitcoin (BTC) dropped below the important support level at $104,000 for the first time since June. It briefly entered a bear market after falling 20% from its all-time high.
Why the crypto bull run is over for now
The crypto market cap excluding Bitcoin, Ethereum (ETH) and stablecoins has plummeted to $670 billion from the year-to-date high of $911 billion. Additionally, the Altcoin Season Index has plummeted to 25.
The Crypto Fear & Greed Index has dropped to the fear zone at 26, a sign that investors are nervous. Liquidations in the industry have jumped this month, crossing the $20 billion milestone on Friday last week.
All these numbers suggest the crypto bull run has ended—at least for now. This plunge has been driven by growing risks in the global economy, including jitters in the regional banking sector and the rising threat of decoupling between the two biggest economies.
Last Friday’s crypto market crash was triggered by a statement from U.S. President Donald Trump that the U.S. would impose a 130% tariff on goods from China. He said this after China warned that it would start export controls on rare earth materials, which are critical to the industrial sector.
A prolonged trade war between the U.S. and China would be risky for the crypto market because it would push inflation higher and make it difficult for the Federal Reserve to continue cutting interest rates.
The crypto bull run has also ended as gold emerged as a better safe-haven asset than gold. Gold price has continued rising and attracting inflows from investors and central banks in the past few weeks.
Additionally, Bitcoin’s price has formed a risky pattern known as a rising wedge, which is made up of two ascending and converging trendlines.
Will the crypto market go up?
The lingering question among investors is whether the crypto market will bounce back as the ongoing crash intensifies.
There are reasons to expect that Bitcoin and other tokens will rebound in the coming weeks or months. First, history shows that Bitcoin’s price often bounces after entering a bear market or a correction.
Similarly, Bitcoin’s price plunged by more than 32% from its highest level in January to its lowest point in April, and then bounced back to a record high.
Similarly, Bitcoin price plunged by over 32% from its highest level in January to its lowest point in April, and then bounced back to a record high.
There are three key catalysts that may boost the crypto market in the coming weeks. First, the Federal Reserve may continue cutting interest rates to support the labor market.
Second, the upcoming meeting between Trump and Xi Jinping at the APEC Summit in South Korea may boost crypto and stocks, especially if they reach an agreement.
Third, the crypto market may rebound if the government shutdown ends and the Securities and Exchange Commission begins approving altcoin ETFs.
