CoinRank Exclusive: Bull Market Squat OR Bear Market Beginning: Will 2025 Repeat the 2018 Bear Market?

Analysis comparing 2025’s 30% Bitcoin correction to 2018’s 84% bear market crash. Examines institutional adoption, on-chain metrics, and policy differences to determine if we’re facing a temporary dip or prolonged downturn.

Since reaching an all-time high of nearly $110,000 in January 2025, Bitcoin has experienced a volatile downward trend. Both February and March closed with negative monthly candles, and by April, prices had fallen to around $74,500—a decline of over 30%. Both the magnitude and duration of this correction stand out even within Bitcoin’s historical halving cycles.

This high-open, low-close market pattern has triggered concerns about a “2018-style bear market“: In 2018, Bitcoin fell from nearly $20,000 to $3,100, an 84% drop, becoming one of the most devastating bear markets in crypto history. The current market shares some similarities with 2018 but also exhibits different dynamics due to variations in the macroeconomic environment, policy support, and market structure.

So is the decline since January 2025 a short-term correction in the halving bull market, or the beginning of a long-term bear market? How will the market trend going forward?

SIMILAR HIGH-OPEN, LOW-CLOSE PATTERN: WILL 2025 FOLLOW A “2018-STYLE BEAR MARKET”?

As 2025 marks the second year of the fourth halving cycle, many had expectations for this year’s market, especially after Bitcoin broke its all-time high in January. However, just when many believed the halving bull run was beginning, the market took a sharp downturn, with Bitcoin dropping over $35,000, and other cryptocurrencies falling by more than 50% and then another 50%.

This pattern of market behavior and sentiment shift bears such striking resemblance to 2018 that many investors are asking: Are we headed for another “2018-style bear market”? Let’s examine this question from multiple angles.

First, looking at similarities and differences:

Looking at similarities, both periods share notable parallels in price action, market sentiment, and external catalysts. Both 2025 and 2018 exhibit a pattern where prices opened high but subsequently closed much lower.

The 2018 downturn was primarily driven by the collapse of the ICO bubble, regulatory crackdowns (particularly SEC investigations), and selling pressure from Mt. Gox, all of which shattered market confidence.

In 2025, the market has instead been rocked by the Trump administration’s tariff policies disrupting global financial markets, alongside diminishing Bitcoin ETF inflows, which together sparked a wave of selling.

The Fear & Greed Index shows that in March and April 2025, the index dropped to 15 twice, approaching the extreme level seen in August 2018, though the duration in 2025 was shorter. Regarding Federal Reserve policy and liquidity pressure, 2018 was in a rate hike cycle (four hikes that year), with tightening liquidity exacerbating selling pressure in the crypto market. In 2025, although the Fed has maintained interest rates, delayed rate cut expectations have caused volatility in risk assets, with tech stock corrections in the US stock market indirectly affecting cryptocurrencies.

Fear & Greed Index Data for the Past Year

(Source: CoinMarketCap)

Analyzing the differences, the 2018 market declined continuously from near its historical high of almost $20,000, with a drop exceeding 80% throughout the year. The entire market’s confidence was severely damaged, and the total cryptocurrency market capitalization shrank significantly.

In 2025, after Bitcoin reached a new high in January and subsequently declined by over 30%, the time span and decline pattern differ from 2018. The 2018 decline was a continuous one-way drop, while the 2025 decline has shown oscillations and reversals rather than a simple linear downtrend.

The structural changes and market resilience between the two periods are also different. First, the policy environment has shifted from regulatory suppression to strategic support. In 2018, regulatory pressure (such as the SEC halting ICOs and banks restricting crypto transactions) was a major cause of the bear market.

In 2025, the Trump administration is promoting “crypto-friendly” policies, nominating an SEC chairman who supports cryptocurrencies, abolishing the SAB121 regulations that restricted bank participation in crypto, and exploring the establishment of a national Bitcoin reserve—policy shifts that inject long-term confidence into the market.

In terms of institutional participation and market structure, by 2025, institutions hold over 1.29 million bitcoins through spot ETFs, with companies like MicroStrategy continuously increasing their holdings. Institutional holdings account for over 12% of supply, far higher than the retail-dominated market structure of 2018.

Regarding stablecoins and liquidity, the current stablecoin market cap has reached $230 billion, compared to just $3 billion in 2018, providing a buffer for the market. When exchange stablecoin balances exceed 35% of total holdings, it’s often viewed as a bottom signal.

Bitcoin ETF Holdings

(Source: Bitcoin Treasuries)

Looking at technical cycles and halving effects, 2018 was in the bull-to-bear transition period after Bitcoin’s second halving (2016), while 2025 is approaching the middle period after the third halving, just one year from the halving event. The halving market has not yet experienced the explosive phase that depletes incremental market funds.

Next, let’s compare more specific aspects such as the broader environment, halving cycles, relevant data, and investor behavior.

Regarding the broader environment, the most important indicator of market liquidity—Federal Reserve monetary policy—shows that in 2018, the Fed was in a rate hiking cycle with gradually tightening monetary policy, while in 2025, the Fed is generally in a rate cutting cycle.

Second, regarding the US economic situation, in 2018, the US economy was in a relatively stable growth phase, but factors like trade frictions began to have some negative impact on the economy, with the overall economic environment providing limited support for the cryptocurrency market. In 2025, the US economy faces new challenges and opportunities, such as debt issues and employment market fluctuations. Increased economic uncertainty may lead investors to seek more diversified asset allocations, potentially changing the attractiveness of cryptocurrencies as an emerging asset class.

Looking at Bitcoin’s own halving cycle and bull-bear transition patterns, after each halving, Bitcoin typically goes through a period of volatility and consolidation before entering a new upward trend. 2018 was in the downward phase after the previous halving cycle, marking the end stage of that entire halving cycle. In contrast, 2025 is the second year after the halving, in the first half of the cycle, and market expectations and reactions to the halving effect may be more positive.

The external causes for the 2018 decline were mainly regulatory tightening and market confidence erosion, while external shocks in 2025 may come more from changes in the global economic situation, geopolitical risks, and the impact of emerging technologies on the cryptocurrency market.

Analyzing key data and on-chain indicators, during the 2025 decline, spot trading volume has significantly contracted, and stablecoin liquidity indicators show funds flowing out of high-risk assets. Meanwhile, the number of active addresses in the ETH ecosystem has also declined, indicating a reduction in overall market risk appetite. This shares similarities with the mass selling scenario in 2018, but also shows signs of institutional funds accumulating at lower levels.

Bitcoin Spot Inflow/Outflow

(Source: CoinGlass)

Regarding Bitcoin dominance and on-chain data indicators, although Bitcoin’s market share has fluctuated during this decline, on-chain indicators such as MVRV Z-Score, Coin Days Destroyed (CDD), and the proportion of holders who haven’t moved their coins for over a year (HODL waves) all indicate that long-term investors continue to hold firmly. Similar on-chain data appeared during the 2018 bear market bottom, with current signals showing some support for a future market rebound.

Analyzing investor behavior and market sentiment, in 2018, market panic mainly stemmed from mass selling by retail investors who bought at high prices; while in 2025, there’s a phenomenon of institutions hedging against retail panic.

Data shows that during this correction, many long-term holders have increased their positions, while the proportion of newly created addresses has risen but is mainly concentrated at the experimental level.

Additionally, although the “extreme fear” index on social media has plummeted, it’s accompanied by some “buy signals,” indicating that bottom capital is quietly entering the market.

Compared to the 2018 bear market, the supply-demand relationship changes brought by the halving may manifest as bottom support signals earlier in 2025. Even if there’s a significant adjustment in the short term, if the market can attract institutional funds and long-term holders at low levels, this correction is more likely to be a “deep squat” in the bull market rather than the beginning of a complete bear market.

2025 OUTLOOK: WILL THE HALVING RALLY RETURN? WHAT SHOULD WE DO?

From the analysis above, this round of decline is more likely to be a short-term correction.

Looking at the broader environment, the probability of a Fed rate cut in June is 94%, which would release liquidity if implemented. US economic data (such as March non-farm payrolls adding 228,000 jobs) shows resilience, with recession risk lower than in 2018.

In terms of on-chain signal data, Bitcoin’s MVRV-Z Score is approaching historical bottoms (<-1.5), and whale addresses have shown significant accumulation with daily net inflows exceeding 10,000 BTC, signaling strong buying interest at these lower price levels.

Regarding potential fund inflows, Bitcoin spot ETFs have shifted from net outflows in February and March to net inflows more recently. Standard Chartered Bank forecasts that the pace of ETF inflows could potentially surpass levels seen in 2024.

Bitcoin ETF Net Asset Value Premium/Discount

(Source: CoinGlass)

From a market perspective, in the short term, the current decline may not be completely over but is approaching its end. Looking at institutional holdings, on-chain data, and technical indicators, although market sentiment is pessimistic, this is a good opportunity to accumulate at low prices.

In the long term, expectations for the fourth halving cycle still hold. Compared to 2018, the market fundamentals and environment have changed significantly. Increased institutional investor participation, relatively stable regulatory policies, and the development of the cryptocurrency ecosystem all provide certain support for the market.

The main risks to watch for going forward are primarily in the broader economic environment. For example, if the global economic situation further deteriorates, Federal Reserve monetary policy continues to tighten, or regulatory policies undergo significant changes, the market may continue to decline.

Therefore, the future market trend requires close attention to changes in various factors, such as:

• Federal Reserve monetary policy
• US economic data (non-farm data, CPI, PCE)
• US stocks, the dollar index, and other traditional market data indicators
• On-chain data indicators like MVRV, the Fear & Greed Index, HODL waves
• Policy changes from the Trump administration’s tariff policies and institutions like the US SEC

Bitcoin HODL Waves

(Source: CoinAnk)

Beyond monitoring these data points and market indicators, successful investment strategies should emphasize disciplined execution. Consider implementing a scaled accumulation strategy where you gradually build positions at predetermined price levels—for example, deploying capital in tranches at $80,000, $76,000, and $72,000.

Confirm potential bottoming patterns using supplementary indicators like extreme readings on the Fear & Greed Index (below 20) and elevated stablecoin balance ratios on exchanges (exceeding 35%).

For asset allocation, consider a diversified approach with core holdings in BTC/ETH while establishing smaller satellite positions in innovative sectors like ZK-Rollups and AI+DeFi projects to mitigate single-asset risk.

Cultivate patience and mental flexibility—short-term fluctuations and emotional volatility are inevitable, but history consistently shows that strategic accumulation during downturns tends to yield outsized returns when bull markets resume.

Above all, prioritize risk management—maintain sensible position sizes and steer clear of excessive leverage to protect yourself from devastating losses that could wipe out your capital just before the market recovers.

CONCLUSION

The Bitcoin market in 2025 shows some similarities to the 2018 bear market but also displays a more mature and institutionalized aspect. Sharp corrections, depressed sentiment, and policy shocks create short-term uncertainty in the market, while on-chain data and institutional positioning suggest that the adjustment may be a bull market squat, providing opportunities for accumulation at low prices.

Historical experience tells us that while markets are difficult to simply replicate, through multi-dimensional analysis, we can be well-prepared for the future market.

The crypto market has evolved into an increasingly mainstream asset class, with institutional participation and diverse investor profiles introducing layers of complexity to market analysis. The days of operating in isolation from broader market forces are over.

While navigating the market requires more sophisticated analysis than before, this complexity also creates additional opportunities. In the short term, savvy investors can identify multiple types of “bottoms”:

• “Policy bottoms” created by volatility from Trump’s tariff announcements
• “Sentiment bottoms” when panic selling exhausts itself and creates natural rebound pressure
• “Technical bottoms” when Bitcoin reaches key support levels confirmed by indicators like MACD, Bollinger Bands, and RSI—all potentially profitable entry points.

2025 has completed less than a third of its course. The current environment is much better than 2018, though also more complex. The crypto world itself is also more diverse, requiring us to continuously explore strategies suitable for ourselves, verify, learn, and improve. Overall, the logic of the fourth halving cycle still holds—spring comes after winter passes.