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From a peak of $120k down to $58k, a 44% drop – is it a bear market or not?

Since hitting an all-time high of $109,588 in January this year, Bitcoin has retraced about 44%. In traditional finance, a pullback of over 20% from a high is considered the threshold for a "technical bear market," and a 44% drop clearly exceeds that. However, compared to the epic bear market of 2022 that fell from $69k to $15k, a drop of 78%, the current retracement seems to have only "completed" half.

But simply using the drop to define the cycle often falls into the fallacy of "carving a mark on the boat to find a lost sword" (sticking to outdated methods). Looking back at March 2020, Bitcoin crashed 40% within days, only to start a spectacular bull run afterwards. Therefore, a more important question than the drop is: Is this decline a continuation of the lingering effects of the 2022 prolonged bear market, or a deep washout during the mid-phase of a new bull market?

The key to breaking the deadlock lies in the expectations of liquidity. The macro environment is the underlying logic that determines the nature of the market: If the Fed starts a rate-cutting cycle as expected by the end of the year, then the current 44% retracement is just a "discount promotion" of quality assets before the liquidity inflection point; conversely, if the Fed sticks to a "higher for longer" interest rate policy, then the current 44% might just be the prelude to the second half.

At the end of the day, the number 44% itself is not important. What truly determines the market direction is whether you believe there is still upward room at the end of the liquidity cycle.
The cooperation in the Trump-themed Dogecoin Conan ecosystem on the Solana chain continues to advance, with market heat soaring. Ending with xBQt.
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