The Bear Market Correction Could Be Over, According To ARK. Reasoning Inside

Rejoice! The bear market might be over. That’s the main thesis behind July’s “The Bitcoin Monthly” report. “Because bitcoin’s price did not rise parabolically during the 2021 bull market, its bear market correction could be over,” ARK reasons. And it makes sense, the numbers seem to suggest it, and it feels like it. However, are we fooling ourselves? Is ARK’s reasoning wishful thinking? Let’s examine the data and see what it tells us.

First of all, “bitcoin closed the month of July up 16.6%, rising from $19,965 to $23,325, its most significant gain since October 2021.” So far, so good. Can we declare that the bear market correction is over, though? Well, “the likelihood of touching its delta cost basis has diminished, bitcoin’s downside risk in a bear market technically stands at its delta cost basis, currently $13,890.” This number seems far away. Maybe bitcoin is slowly getting out of its slum.

“Bitcoin has corrected 72% relative to its alltime high. Although this drawdown is consistent with intracyclical corrections, like the COVID collapse in 2020, bitcoin usually finds global cyclical bottoms with a correction greater than 80%.”

That doesn’t sound as promising. Maybe there’s more pain ahead, however… “Given the positive correlation between bitcoin and US equities since COVID, the US being the leading price mover of bitcoin suggests an emerging risk-on market environment,” ARK claims. Apparently, the US has been leading the bulls lately. Perfect. Bitcoin needs all the helps it can get in these trying times.

Are We Leaving The Bear Market? Let’s Look At The Signs

“Contagion in the crypto markets appears to be contained, as Celsius and Three Arrows Capital officially file for bankruptcy.”

Announcing the Celsius news, NewsBTC said “After weeks of conjecture and hearsay, Celsius’s legal counsels have formally informed regulators that the cryptocurrency lender has filed for Chapter 11 bankruptcy protection.” Announcing the 3AC one, we said, “Crypto hedge fund 3 Arrows Capital is slated to be another pillar piece of 2022’s bear market headlines, joining the likes of brutal bear market moments that include Terra Luna’s downfall and CeFi’s drama.”