Unlike the 2021 crash, does the current Bitcoin price trend indicate a bear market?

Recently, the price of Bitcoin has fluctuated violently, which has attracted widespread attention from the market. On March 11, its price fell to a 4-month low of $76,700. This phenomenon has caused many people to think about whether Bitcoin has entered a bear market? But comparing the current trend with the 2021 crash will reveal many differences.

Judging from the price correction, Bitcoin fell 30% from its all-time high of $109,350. Although the amplitude is large, Bitcoin fell from $69,000 to $40,560 in the crash in November 2021, a more astonishing decline. Moreover, it took 60 days to complete a sharp decline in 2021, and the pace and amplitude of this adjustment are different.

In terms of US dollar trends, at the beginning of the bear market at the end of 2021, the US dollar strengthened against a basket of foreign currencies, and the DXY index rose from 92.4 in September 2021 to 96.0 in December. At the beginning of 2025, DXY was 109.2, and has since dropped to 104. Because Bitcoin is mainly regarded as a risky asset and is negatively correlated with the DXY index, the current weakening trend of the US dollar has some support for its price, which is different from the situation in 2021.

Looking at the Bitcoin derivatives market, despite the decline in Bitcoin’s price, its current annualized premium for futures is still 4.5%. Looking back at the annualized premium of futures fell below 0% after the Bitcoin price crash on June 18, 2022. At the same time, the financing rate of Bitcoin perpetual futures is close to zero, indicating that the demand for leverage between the bulls and bears is balanced, while in bear markets, the demand for short positions is usually excessive, which will make the financing rate lower than zero. This shows that the current derivatives market situation does not match the bear market characteristics.

The performance of the stock market also affects the trend of Bitcoin. The S&P 500 has recently fallen 6% in a week, with stock market adjustments pushing the index to its lowest level in six months, and investors expect an increase in the likelihood of a global recession. However, even in such a general environment, Bitcoin still shows its own characteristics, and its price trend is different from the stock market background when the 2021 collapsed.

The current market conditions also show no signs of investors turning to cash positions. In bear markets, investors tend to hold cash to avoid risks, but the Bitcoin market currently does not show this typical feature, which indirectly supports the price of Bitcoin, indicating that the current market atmosphere is different from the bear market.

In addition, the current Bitcoin price adjustment is more similar to the interim pullback from $71,940 to $49,220 on June 7, 2024. After that medium-term correction, the market gradually recovered, which also provided a reference for the current Bitcoin price trend. Perhaps this adjustment was not the beginning of a bear market.

Analyst Marcel Pechman said Bitcoin’s pullback may have ended due to the impact of derivatives markets, weakness in the U.S. dollar and the contagious effects of the U.S. budget crisis. From a comprehensive analysis of multiple aspects, although the price of Bitcoin has dropped sharply, compared with the collapse in 2021, there are significant differences in the price correction process, US dollar trend correlation, derivatives market performance, stock market background and market capital flows, and the current price trend does not necessarily indicate the arrival of a bear market.