Bitcoin Blows Past $85,000

The Roundup is Rhino’s weekly read for people who’d rather build a process than predict a price.

Is it too soon to celebrate?

Bitcoin blew past $85,000 this week for the first time since January, prompting everybody to wonder whether the bear market is finally over. 

The answer — depends. 

If you look at the chart, then yes. But it’s one thing to say that the bear market is over and another thing entirely to say that the price will go straight up from here. 

A bear market doesn’t just happen over one day; much like it doesn’t end overnight. There needs to be a consistent pattern of lower lows and lower highs where sellers overwhelm buyers.

In June, that trend began to end. Bitcoin had stopped making lower lows, and yesterday it made its first higher high since last October’s record price above $126,000. It also closed a full week above its 50-week average price — the average weekly price over the past year — for the first time in 45 weeks. 

Bear market or not, at Rhino we’re offering you 8 more days to win free Bitcoin:

In plain terms, a line that acted as a ceiling all year just flipped into a possible floor. This is a structural shift on the chart. 

Indeed, Galaxy Research’s Alex Thorn puts numbers on why it matters. In 11 of the last 13 instances Bitcoin reclaimed that line since 2011, it never made a new low afterward.

For months we’ve been waiting for Bitcoin to find its footing. But a bottom isn’t necessarily a moment. Rather it’s a sequence, and it runs the same way every cycle.

First, sellers give up. Then, the falling stops accelerating. Afterwards, price starts holding levels that everyone expected to break. Later on, long-term averages get reclaimed. Drops get shallower, and bad news stops pressuring the price down.

Finally, the market takes out its last high and forces even the diehard bears to admit the structure changed. Look back over the past few months, and Bitcoin has walked through that entire checklist. This week's higher high was the last box.

However, there’s some fine print to this rally. 

First, the idea that the bear market is finally over is more about the shape of the chart than a promise about the price. 

The last two times this exact signal fired — in 2019 and 2023 — Bitcoin still fell hard afterward. The difference was that those drops happened inside a new uptrend instead of the old downtrend. 

Second, it’s important to look at how we got here. 

Monday’s leap to $85,000 wasn’t entirely based on a wave of fresh conviction. Most of it was largely a short squeeze, with roughly $300 million of bets against Bitcoin force-bought-back in a single hour. 

Moreover, the institutional ETF crowd mostly sat it out. After buying much of the last two years near the highs, the average Bitcoin ETF holder is right about breakeven.

And third, all of this happened following a bad-news week. The Fed raised rates (to 3.75% to 4.00%, its first hike in over three years) and a major crypto bill died in the Senate.

Bitcoin shrugging that off is genuinely bullish, but rising rates and ~5% bond yields are real headwinds that haven’t gone anywhere.

So, is the bear over? On the chart, yes. The downtrend that began last October is broken. But before we’re in the clear, keep your eyes on two lines. If Bitcoin holds above roughly $78,800 on the weekly chart, the reclaim is real. Clear $83,000 and even stubborn bears will have to fold.

Lose the aforementioned level, however, and file this rally under false alarm. 

Chat next week,

The Rhino Research Team