The bear market has ended, and a new bull market cycle has begun

Written by: angelilu, Foresight News

Three days, just three days.

Bitcoin surged from a low of $64,100 on August 19, skyrocketing to $79,500 on August 21 (at the time of this article's publication, the BTC peak was $75,720, data updated) ------ over 20% increase in three days.

Just a few days ago, the market was still mired in the "bear market" quagmire, with fear (index 46) to greed (index 72) separated by only three bullish candles.

The real numbers behind the market volatility are shocking. According to CoinAnk data, the total liquidation amount of crypto assets across the network once exceeded $4 billion, with shorts accounting for $3.7 billion, setting the most severe short squeeze record since 2021.

Bitcoin's market capitalization is currently reported at $1.5 trillion, surpassing Meta's $1.39 trillion, ranking 13th in global asset market capitalization. The total net inflow of Bitcoin spot ETFs yesterday was $606 million, marking four consecutive days of net inflow.

The total market capitalization of altcoins has returned to $1 trillion after nearly a month, with coins like ETH and XRP performing remarkably:

ETH surged 18% in a single day, with a weekly increase of 25%, currently reported at $2,361, reaching a new high in over two months;

XRP rose 20% in 24 hours, with a weekly increase of 31%, currently reported at $1.3, adding about $10 billion to its market capitalization in a single day;

HYPE increased 15% weekly, peaking at $75, approaching the historical high of $76.85;

SOL briefly broke through $90, with a weekly increase of nearly 15%.

For digital asset treasury companies, this round of increases has directly changed their financial fate. As of August 16, Strategy held 840,447 BTC at an average cost of $75,385. With BTC rising, this largest publicly traded Bitcoin holder has just broken even.

Why the Rise

The frenzy came so swiftly that everyone is asking the same question: Has the bear market really ended?

This round of explosive growth is not without reason. On August 19, the U.S. Treasury announced it would at least double the scale of long-term Treasury bond repurchases, raising it from $2 billion to $4 billion per transaction, causing the 30-year U.S. Treasury yield to drop from 5.337% to 5.187%, and the dollar index fell below 99 ------ a signal of loosening liquidity.

On the same day, Trump gathered a group of crypto industry leaders at the White House, from Coinbase's Brian Armstrong to Ripple's Brad Garlinghouse, urging the Senate to push the CLARITY Act and stating that the U.S. is considering purchasing a "considerable amount" of Bitcoin reserves.

Just a day earlier, on August 18, the SEC had just proposed a new regulatory framework, loosening the soil for compliance pathways.

On August 21, U.S. regulatory actions continued, releasing more positive news. CFTC Chairman Michael Selig, at the first meeting of the agency's Innovation Advisory Committee, made a stronger statement: If the CLARITY Act "continues to stagnate due to Democratic obstruction, the CFTC will use its existing authority to establish a system for the crypto asset market."

He stated that he had instructed staff to begin researching rules to stabilize the crypto market structure, covering crypto exchanges, leveraged and margin trading, as well as compliance pathways for on-chain financial protocol developers.

Whales Betting Real Money

This surge was also accompanied by a bloody short squeeze, with a large number of short positions being forcibly liquidated, which was also a market structural factor for this rise.

Since July 8, Bitcoin had been struggling in a narrow range of $62,000 to $66,900, and the confidence of shorts that had built up over six weeks was shattered as the market rose.

According to Lookonchain data, the three addresses with the largest losses from short liquidations were in the hundreds of millions. The address starting with 0x8c96 was liquidated for 1,829 BTC, about $120 million; pension-usdt.eth had 49,808 ETH liquidated, about $111 million; the address starting with 0x8eff was liquidated for 1,343 BTC, about $92.56 million.

The most typical victim was the well-known whale in the Chinese community, "Set 10 Big Goals." On August 19, he had just made $20 million from a long position, only to turn around and short at a high price, opening a total of $222 million in BTC and ETH short positions. After the market surged, he was forced to liquidate on August 20, losing $6.28 million.

But he did not stop. On August 21, he jumped back in and opened shorts again ------ totaling about $17.9 million in BTC and ETH short positions, with an average opening price of $74,506.57 for BTC and $2,346.83 for ETH.

During the surge, some whales chose to cash out at high prices while others chose to increase their short positions: two whale addresses sold 5,250 ETH and 550 BTC, making a profit of $6.26 million; another address that had accumulated a long position of 120,000 ETH increased its position, with the two wallets holding a total of $182 million in long positions, with an average opening price of about $2,265.

What Analysts Think

The on-chain liquidations and position adjustments sketch out the micro battlefield of this market ------ shorts were slaughtered, and bulls showed divergence, with some fleeing and others adding positions. But what do these fragmented individual actions point to when pieced together? What do analysts think?

Optimists are confident. Bitwise research analyst Ishmael Asad stated that he views this market movement as "the strongest confirmation that the bottom has emerged so far," and that institutional allocation is just beginning, with long-term capital inflow potential still present.

Coinbase CEO Brian Armstrong stated, "We are very likely on the eve of the next bull market for crypto spot trading";

Trader mignolet publicly corrected himself, stating that he had never expressed a bullish view since August 2025, but now admits he was wrong. The current rebound may last longer, and he no longer expects an easy breakdown. He announced that he is now bullish on Bitcoin and will stop shorting.

CryptoQuant founder Ki Young Ju stated that the demand for spot and perpetual contracts has turned positive simultaneously, marking the first time since the historical peak in October 2025. The bear market has ended, and a new bull market cycle has begun.

From the institutional side, Geoff Kendrick, head of digital asset research at Standard Chartered, set a year-end target of $100,000, while Mark Connors, chief investment officer at Risk Dimensions, even predicted BTC could reach $180,000 to $360,000 by 2030.

Analyst Beth Kindig, known as the "Queen of Nvidia," stated that the I/O Fund has raised Bitcoin's long-term target price from $1 million to $2 million.

But some analysts also caution against rushing to chase highs. Smart Money stated that this rebound is not a bottom reversal but a "trap" surrounding the September CLARITY Act vote, rebounding around support levels and attracting short positions while clearing leveraged accounts. The 4-hour RSI indicator is at 92.6, up from 82.8 yesterday morning, in the overbought range, suggesting not to chase highs for now and to observe whether it can hold above $73,244.

Trader Peter DiCarlo believes in long positions over shorts, stating that Bitcoin could look up to $80,000. Long-term, he remains bullish, believing that a new historical high will be reached within 12 to 18 months, but the internal structure is currently still bearish. Prices are pushing into the short-term "smart money range" resistance level. To change the internal structure, an effective breakthrough above $85,000 must be seen.

The Next Key Date: September 15

In just three days, Bitcoin has nearly recovered the declines of the past two months. After a significant clearing of short positions, the real test is just beginning ------ what must follow is sustained real buying.

The market will focus on verifying several things next: whether the net inflow of Bitcoin spot ETFs can continue to remain positive; whether the price can effectively break through and stabilize above the important resistance zone of $78,000--$80,000; whether it can continue to push against the average cost line of all active investors (about $75,800); and the voting results of the U.S. Senate on the CLARITY Act on September 15.