Has the Bear Market Ended or It’s Just a Fake-Out? Analysts Debate

The crypto market turned green in the first week of May, but skepticism remains strong. Some believe current signals show signs of a larger upcoming bullish cycle, especially as Bitcoin breaks a key psychological threshold.

However, others warn that temporary factors may be distorting the indicators. This article uses on-chain data and historical patterns to explore both sides of the argument.

Is the Crypto Market About to See a Bull Run?

CryptoQuant’s Bull-Bear Market Cycle Indicator, designed to identify bullish and bearish phases in the crypto market, has recently shown positive signs.

Since February 24, 2024, the indicator has consistently signaled a bearish market. However, in recent days, it has begun to show signs of a potential reversal.

Bitcoin Bull-Bear Market Cycle Indicator. Source: CryptoQuant.

Still, the signal remains weak and unclear. During mid-2024, this same indicator caused misleading predictions. The market moved sideways for a long time without forming a clear trend.

Analyst Burakkesmeci added observations using the 30-day and 365-day moving averages (30DMA and 365DMA) to clarify the bullish potential.

“More importantly, the Bull-Bear 30DMA — a short-term moving average — has turned upward. If this metric crosses above the Bull-Bear 365DMA, history suggests we could see parabolic rallies in Bitcoin once again,” Burakkesmeci predicted.

However, analyst Darkfost offered a more cautious perspective when reviewing the Growth Rate Indicator. This indicator assesses the state of the Bitcoin market—bull or Bear—by comparing the Market Cap and Realized Cap of Bitcoin.

He noted that the indicator is returning to bullish territory, coinciding with Bitcoin ($BTC) reclaiming the crucial $100,000 mark.

Bitcoin Growth Rate Difference. Source: CryptoQuant.

Instead of predicting the end of the bear market and the start of a bull run, Darkfost warned this could be a false recovery triggered by special conditions.

These special conditions include Donald Trump signing a trade agreement with the UK, which helped ease concerns over tariff shocks. Meanwhile, the Federal Reserve maintained a cautious stance and kept interest rates unchanged.

“It’s possible that traditional market dynamics will continue to be disrupted for some time, making the current environment particularly difficult to read,” Darkfost said.

Another noteworthy data point is the Crypto Fear & Greed Index. It rose to 73, entering the “Greed” zone — its highest level in two months. This suggests that investor sentiment is shifting from caution to excitement.

Crypto Fear & Greed Index. Source: Alternative

However, high levels of “Greed” or even “Extreme Greed” often serve as warning signs. Historically, these levels have preceded major price corrections.