Bitcoin Rally Sparks Debate Over Whether the Bear Market Is Over

Key Takeaways

• Bitcoin’s sharp move toward $80,000 appears largely driven by a short squeeze and cascading liquidations after it broke key resistance levels and its 200-day moving average.
• Analysts remain divided over whether the rally marks the end of the bear market, with some warning that sustained spot Bitcoin ETF inflows and easier monetary conditions are required to confirm a lasting recovery.
• Recent U.S. regulatory developments, including work on the Clarity Act and moves toward clearer SEC and CFTC rules, have provided additional support for digital assets.

The current Bitcoin rally has reignited debate over whether the cryptocurrency market is entering a new bullish phase or simply experiencing a sharp short squeeze.

According to CoinGlass data, Bitcoin climbed to $79,200 on Friday before pulling back toward $77,000, after breaking above key resistance around $66,000 and its 200-day moving average.

(Source: CoinGlass)

The move was accompanied by cascading liquidations of leveraged short positions, accelerating Bitcoin’s advance.

Mati Greenspan, founder of Quantum Economics and a former senior eToro analyst, said Bitcoin has shown “nice momentum” in recent days.

Greenspan said, “They begin with a short squeeze, a giant green candle, start breaking above technical levels, and suddenly everyone with limit orders waiting for BTC to drop to $40,000 is now rethinking their strategy, telling themselves: I better get on board before I miss the boat.”

Greenspan also highlighted that fear of missing out, or FOMO, could make another major pullback less likely in the near term.

However, other analysts remain cautious.

Jason Fernandes, market analyst and co-founder of AdLunam, urged caution. He said, “I would be cautious about calling this the end of the bear market, though, without sustained spot ETF inflows and clear macroeconomic rate easing.” Without those factors, he warned that BTC could lose momentum near overhead resistance.  

But Greenspan doubled down anyway and said, “The current setup seems very familiar, and the odds of a significant pullback are looking very slim right now.”

Greenspan highlighted key developments including the White House openly discussing Treasury operations, the U.S. Senate working on the Clarity Act, and both the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) moving toward greater regulatory clarity.

Fernandes also pointed to the U.S. Treasury’s decision to increase the maximum size of long-term bond buyback operations from $2 billion to at least $4 billion. The initial decline in long-term Treasury yields also provided some support for digital assets.

Fernandes said, “That caused an upward push which triggered cascading liquidations among derivative short sellers, accelerating the spike. Breaking key resistance levels like $66,000 and the 200-day moving average also triggered algorithmic trend-following buys.”

LO: TECH, a London-based digital asset liquidity and market data firm, lead researcher Adam Morgan McCarthy described Bitcoin’s Wednesday move as a classic short squeeze, noting that more than half of BTC’s 7.1% gain occurred within a single hour.

The rally therefore sends mixed signals.

Strong technical momentum and forced short covering favor further upward movement. For now, the rally shows improving momentum but not enough confirmation that the bear market has ended. ETF flows, interest rates, and resistance levels remain critical for determining whether the current Bitcoin move develops into a sustained bull run.  

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