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Crypto rally: Are bears in front, or will a bull run win out?

By Daniela Ešnerová


Bull and bear stock-market symbols balance on business investing scale
Cryptocurrency market watchers are passionately debating what the latest BTC rally means for the bear/bull spectrum – Photo: Shutterstock

After hitting its six-month low in January, bitcoin (BTC) bounced up by 36.5% in two weeks. Are we witnessing a relief rally or have the bulls seized control of the market? 

Bitcoin had been on a gradual downfall since November, when the US Federal Reserve (the Fed) aired its intentions to tighten monetary policies, but on 21 January, the oldest cryptocurrency plunged to a six-month low, hitting the $33,000 territory. 

Some two weeks later, on 4 February, better-than-expected employment figures from the US sparked a four-day rally, during which the crypto king grew by 18%.

As the market tries to make sense of the recent rally, Crypto Fear and Greed Index, which measures the sentiment in the cryptocurrency market, has swung to ‘neutral’ after pointing to an ‘extreme fear’ in the market in the first two months of 2022.

“It’s hard to say if we are in a strict bear or bull market. Bitcoin is currently climbing the wall of worry. While there have been signals from the Fed that rates will rise, there have been a lot of positive things happening in the market as well,” says Adrian Kolody, co-founder of Domination Finance.

“The recent jobs report was stronger than expected and so were many recent earnings reports. In essence, the market is balancing the long-term prospect of higher interest rates with the short-term strong earnings results.”

Sturdy support and negative monthly returns

BTC’s rally got a fresh lift from Consumer Price Index (CPI) data released on 9 February, but ultimately this was not enough to ensure the coin would break through the $46,000 mark.

The $30,000–$40,000 range, where the olderst virtual currency found its bottom in 2022, represents a “sturdy support” for bitcoin bulls, according to an analyst who goes by the pseudonym ‘Checkmate’ at on-chain data and intelligence platform glassnode.


0.14 Price
-2.120% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872


3,446.11 Price
-1.560% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


0.61 Price
+1.640% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


179.86 Price
-1.900% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

Checkmate reminds us that this area provided support during the 2021 crash and the September correction, but he also points to the metric that has historically served as a prelude to bear market and sell-off events: 

“BTC monthly returns were negative during 2022, which only happened a couple of times in the past five years:

  • the corrections in January–April 2018, which started the bear market;
  • the November 2018 bear-market capitulation event;
  • the March 2020 market-wide sell-off as Covid locked down global economies;
  • the May 2021 sell-off and de-leveraging event; and
  • the year-to-date performance in 2022.”

So, are we in for another downturn? There is “a reasonable degree of momentum behind this rally, with short-term holders returning to profitability”, according to Checkmate. 

“[The] key to watch moving forward is whether long-term holders and older coins take exit liquidity, and whether the rally can be supported by renewed demand, which has been lacking in general since the May sell-off,” he adds.

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Exchange activity close to previous bear-market levels

Meanwhile, Jan Wüstenfeld, an on-chain analyst for crypto research firm Quantum Economics, points out that data on the numbers of exchanges signifies proximity to bear-market levels. 

“As measured by the seven-day moving average number of addresses sending bitcoin to and receiving bitcoin from exchanges, exchange activity has dropped close to the previous bear-market levels,” he wrote in a post on CryptoQuant.

Wüstenfeld adds: “We already saw a decline in these metrics on the second-price all-time-high of bitcoin last year, but since 2022, both metrics have been dropping substantially.

“While this does not mean that bitcoin is in a bear market, it shows that activity is overall still very low, and not even the most recent price action could bring activity back.”

Markets in this article

Bitcoin / USD
67512.95 USD
-223.65 -0.330%

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