Bitcoin Bear Goggles

Today's discussion focuses on Bitcoin and analyzing the market with a "bear goggles" perspective. It's challenging to discern whether short-term market movements are temporary or indicative of a larger trend. About five to six months ago, I suggested Bitcoin was entering a bear market and that it made sense to maintain a bearish outlook, at least for the first half of 2026, and often mentioned October as a key period. When we experience rallies, like the current one, I question if the present situation differs significantly from previous bear markets. If differences are found, it might be time to remove the bear goggles; otherwise, maintaining a bearish stance remains justifiable. Regarding bear market rallies, I previously stated that I wouldn't attempt to time counter-trend rallies but would discuss when market lows might occur. I predicted a low in February and another in April, potentially a higher low. Technically, the low occurred in late March, making my specific timing slightly off and it wasn't a lower low as I had considered a decent chance for. This illustrates the difficulty in predicting counter-trend rallies precisely. I want to explore how bear markets have unfolded historically to determine if there's a reason to abandon the bearish perspective. A key difference in this bear market compared to prior midterm years is that Bitcoin topped on apathy, not euphoria. Previous tops in 2013, 2017, and 2021 were euphoric. A non-euphoric top might lead to a different bear market, which is why comparisons to the 2019 bear market are relevant. Some might argue it wasn't a non-euphoric top since Bitcoin reached all-time highs, but diminishing returns would naturally lead to less dramatic increases. The social interest in crypto this past cycle remained relatively low. YouTube views for crypto channels and follower counts for Twitter analysts never fully recovered, indicating a lack of retail investor engagement. This supports the argument for a more apathetic top. Another clear indicator was the lack of rotation into higher-risk assets like altcoins. Bitcoin dominance has continued to rise, and excluding stablecoins, it's nearing a new cycle high. Altcoins never stopped bleeding against Bitcoin, even after Bitcoin's top in late 2025. Now, let's examine if Bitcoin's current move is different from past patterns. In some ways, yes; in others, no. Looking at Bitcoin's year-to-date ROI in midterm years, 2026 is trending above the average of prior midterm years. On average, Bitcoin is down 30-35% from the yearly open at this point in a midterm year, but currently, it's only down about 10%. This places us outside one standard deviation, suggesting something is a bit different due to its sustained elevated position. However, historical examples show similarities. In 2014, after initial weakness, Bitcoin rallied back to approximately 10% below the yearly open a month or two later than our current situation. So, reaching this level of recovery isn't unprecedented. In 2018, Bitcoin had a low in February, a higher low in April, and topped out in early May, similar to our current pattern of a February low, a higher low in late March, and a subsequent rally. A key difference is that in 2018, the March high was higher than the May high, whereas this time, the March high is lower than the May high. Despite these differences, the timing of tops (March and May) and lows (February and April) shows parallels. In 2014, the lows were in February, April, and October, skipping a summer low which instead formed a lower high. Regarding moving averages, Bitcoin has gone above the bear market resistance band (now arguably the bull market support band) in previous bear markets. This happened in 2022, 2019, early 2020, a couple of times in 2018, and in 2014. In 2014, Bitcoin rallied for a few weeks, came back to test the band, stayed above it for a couple of months, then went down to the October low. The current move shows similarities to 2014, where Bitcoin went straight above the bull market support band and will likely retest it. Looking at the 200-day moving average on the daily timeframe, Bitcoin often checks in with it during bear markets. This occurred in 2022, 2018 (sometimes getting above it), 2019, 2020 (before a recession), and 2014, where it rallied up to the 200-day moving average around summer. In 2014, after the April low, Bitcoin rallied to the 200-day moving average, held for a week, then returned to test the bull market support band in mid-June. It went past the support band, tested it, went back up, was rejected, and then formed the October low. In 2018, Bitcoin rallied towards the 200-day moving average in early May but didn't quite reach it. Later in 2018, it rallied through the bull market support band, got close to the 200-day moving average, retested the support band, and then moved back down. The 2019 rally is a good comparison due to a similar 53% drawdown and a slow, trending rally that leads bearish investors to capitulate. In 2019, Bitcoin rallied past the bull market support band. Currently, we are in a similar position, having rallied through the support band but not yet reaching the 200-day moving average. After hitting the 200-day moving average in 2019, Bitcoin pulled back to test the support band before rallying to a higher high, then collapsed due to a recession. The recurring pattern is that Bitcoin goes up to or around the 200-day moving average, pulls back to the bull market support band, and then gets a bounce. In 2019, it was a higher high; in 2018, a lower high; and in 2014, it went to the 200-day, came down, bounced to a lower high, then continued down into October. While I don't have a crystal ball, the current actions of Bitcoin are not fundamentally different from what we've seen in prior bear markets. The problem with this view is that if I'm right, it will seem obvious in hindsight; if I'm wrong, by the time the market proves it, we'll be well off the lows. I still believe there's a decent chance Bitcoin will see new lows later this year, despite the current extended rally. Some argue this rally is very different, but if we compare the length of rallies between lows, it's not. In 2018, the low in February was followed by the next low in late June/early July, a significant duration. In 201