Is the crypto market entering a bearish phase? - 10-03-25

Has the Cryptocurrency Bear Market Begun?

In recent weeks, the cryptocurrency market has seen significant declines, leading many analysts and investors to question whether we've entered a bear market. However, determining this phenomenon with certainty is not straightforward, as the behavior of digital assets differs considerably from that of traditional markets.

What Defines a Bear Market in Cryptocurrencies?

According to the classic definition from Investopedia, a bear market occurs when asset prices fall by 20% or more from their peaks, sustained over time. However, this definition was designed for traditional stock markets, where such a decline is significant. In cryptocurrencies, 20% drops are common and don't necessarily indicate a bear market.

Bitcoin: Is It in Bear Market Territory?

Currently, Bitcoin has dropped 25% from its January highs, which, according to traditional definitions, could signal a bear market. However, within crypto analysis, this decline is still not seen as enough to confirm this trend.

The Outlook for Altcoins

Market analysis during a bear phase shouldn't be limited to Bitcoin and Ethereum, as many altcoins exhibit different behaviors. Some cryptocurrencies, such as XRP and Solana, are experiencing similar correction levels to BTC, while others, like Avalanche (-87%) and Bitcoin Cash (-92%), have seen much more significant declines from their highs.

To assess the overall state of altcoins, the Total3 index is often used. This index measures the total market capitalization excluding Bitcoin, Ethereum, and stablecoins. Currently, Total3 has fallen by 30% from its December 2024 highs— a significant drop but still not enough to declare a bear market in the altcoin sector.