The crypto market has seen dramatic ups and downs over its short history, with periods of rapidly rising prices (bull markets) followed by steep declines (bear markets). To understand where the market may go in 2024, it helps to look at historical cycles.
In this blog, we provided a beginner-friendly overview of prior crypto bull and bear markets—what fueled them, how long they lasted, and how much prices rose and fell.
What is a Bull Market?
A bull market describes a sustained period when investment prices rise faster than the historical average for that market, like stocks, bonds, crypto, or real estate. It is marked by positive investor sentiment, rallies, and record gains that can often detach asset prices from their actual value.
We saw this in the prolonged crypto bull run from 2020 to 2021. After cratering in 2018-2019, bitcoin and cryptocurrencies entered a raging bull market starting in H2 2020. Mass institutional and retail investment powered Bitcoin on a staggering 10x price increase within a year, reaching a new peak of around $64,000 by April 2021.
Other significant crypto assets like Ethereum recorded triple-digit percentage gains, and the overall market surged over 600% to a $2.5 trillion market cap before cooling off in late 2021. Bull run catalysts can include economic growth, new technologies, easy monetary policy, and hype.
What is a Bear Market?
A bear market, conversely, refers to a prolonged period of falling prices and investor pessimism for a particular asset class, like stocks, commodities, or cryptocurrency. It is the opposite of a bull market.
In a bear market, asset prices drop 20% or more from their most recent peak, often due to negative sentiment and selloff behavior rather than underlying fundamentals.
An example is the crypto bear market of 2018-2020. After bitcoin hit an all-time high of nearly $20,000 in December 2017, it began a steep decline, triggering mass panic selling. By December 2018, bitcoin had plunged over 80% to around $3,200.
The entire crypto market lost over $640 billion in value during this bear slide. Other factors, like regulations, security issues, and failing projects, exacerbated the selloff. It took until mid-2020 for Bitcoin and crypto to start recovering back into a bull market.
Evolution of Bear and Bull Markets
The cryptocurrency market has experienced dramatic bull and bear cycles since Bitcoin's inception in 2009, but the magnitude of these crypto-economic cycles has intensified as blockchain markets have matured over the last 5 years.
Historical crypto market analysis shows Bitcoin traded under $1,000 for most of its early existence. The first major Bitcoin bull market kicked off in early 2017, as cryptocurrency started gaining mainstream traction and sparked a retail investment mania.
Fueled by hype, Bitcoin surged from under $1,000 to just under $20,000 by December 2017 - a nearly 20x price increase within 12 months that extended across smaller altcoins. However, this euphoria quickly reversed in 2018 as regulators cracked down, heralding the infamous "crypto winter" bear slide lasting into 2019.
At its lowest point, Bitcoin erased 80% of its value from its 2017 peak, bottoming around $3,200.
However, improving fundamentals like institutional custody solutions and PayPal's support soon brought Bitcoin out of this bear market, according to market analysis. In mid-2019, prices consolidated and slowly climbed back towards $10,000.
By late 2020, Bitcoin had kicked off a fresh bull market as corporate and institutional investors jumped aboard, lending new legitimacy that would power a 10x run within the next year. Mainstream adoption and bullish cryptocurrency trends 2024 predictions further fueled price rises. After topping out near $64,000 in April 2021, Bitcoin retreated into a 6-month consolidation phase between $30k-$40k.
Between mid-2021 and early 2023, crypto consolidated in what could be an extended bear phase, with Bitcoin trading between $17k-$25k for over 12 months as part of ongoing digital currency market trends.
This period tested common cryptocurrency investment strategies. But improving fundamentals around institutional custody, Lightning Network progress, Ethereum's Merge, greater regulatory clarity, and rising web3 jobs have analysts predicting a return to a crypto bull market sometime in 2023 or 2024.
Though short-term cryptocurrency market predictions remain speculative, long-term blockchain market evolution points towards further mainstream integration. As global adoption continues rising, retail and institutional investor interest could ignite the next massive crypto bull run.
Crypto Market Trends 2024: Way Forward
Crypto markets face a pivotal year in 2024. After a brutal bear market saw bitcoin plunge from all-time highs of $69,000 in late 2021 to lows approaching $17,000 in 2022, cryptocurrency is poised for a recovery phase back into a bull market sometime over the next two years. Exactly when prices bottom out and reverse depends on several key factors.
The bitcoin halvings, which occur every 4 years, will be a major catalyst on the radar for 2024. Based on historical timing, the next halving should occur in early 2024, possibly in March. These events, which reduce bitcoin mining rewards by 50%, have preceded crypto mega-bull runs in past market cycles by slashing new bitcoin supply rates at times of rising adoption. If history repeats, bitcoin could enter its next bull charge to new highs after bottoming out somewhere between $18,000 to $22,000.
Broader macroeconomic trends, like stock markets and inflation, will also influence crypto prices. If the predicted global recession pushes through mid-2024, risky assets could face further declines - delaying when crypto initiates its next bull market.
However, a tighter money supply from an improving economy later in 2024 would likely benefit scarce assets like bitcoin. Greater regulatory clarity worldwide and rising institutional custody solutions for cryptocurrency should also remove barriers for the next growth wave beyond 2024.
Predicting exact figures, given crypto's inherent volatility, remains speculative. But if halving and macro-factors align into the perfect storm, bitcoin realistically has potential to hit somewhere between $100k - $150k at the peak of its next bull cycle based on past market patterns - likely unfolding over 2025-2026 with the roots in 2024. Lesser cryptocurrencies should record even stronger percentage gains once bitcoin reclaims the bull market lead.
Rounding up- Bear and Bull Market Evolution
2023-2024 marks a hopeful transition period for crypto to flip from bear to bull trends. The current consolidation around $45,000 represents the calm before the next major volatility uptick. The pieces are falling into place for cryptocurrency to embark on its next parabolic bull market by 2025 if it can hold support through upcoming bitcoin halving and economic shakeouts over the next 12 months.
The long-term crypto adoption trajectory remains highly bullish moving towards 2030.
FAQs on Bull and Bear Market History
1. What is the history of bear markets?
Bear markets, marked by declining asset prices, have historical instances like the 2008 financial crisis. It saw widespread panic, collapsing stocks, and an economic downturn. Learning from such events helps investors anticipate and navigate future bearish trends.
2. How do bull markets evolve over time?
Bull markets, characterized by rising asset prices, evolve with economic cycles. Notable examples include the post-2009 recovery, driven by stimulus measures and optimism. Understanding the dynamics of bull markets aids investors in identifying opportunities during periods of sustained growth.
3. What role does technology play in recent bull and bear market trends?
Technology significantly influences market trends. The 2022 tech bubble burst is an example where overvalued tech stocks faced correction. Conversely, technological advancements, as seen in the rise of blockchain, can drive bull markets by fostering innovation and market adoption.