Arkham Flags Onset of Crypto Bear Market Conditions

• Arkham defines bear markets as prolonged drops with lower highs, weak sentiment, and thin liquidity.

• Crypto drawdowns often reach 70–90%, deeper than traditional 20% bear thresholds.

• Bitcoin is down over 50% this cycle; Arkham says the downturn remains in early months.

Crypto analytics firm Arkham said the cryptocurrency market has entered a bear phase, according to a public statement released recently. The assessment points to sustained price declines, weak sentiment, and forced selling across the market. Arkham said these conditions define a bear market and explain the current downturn.

How Arkham Defines a Bear Market

According to Arkham, bear markets show prolonged price declines rather than short corrections. In traditional markets, prices typically fall more than 20% from recent highs. However, crypto markets often see deeper drawdowns, with declines between 70% and 90% during severe cycles.

During these periods, prices form lower highs and lower lows across most timeframes. At the same time, investor sentiment shifts sharply negative, replacing earlier optimism. Trading volumes also tend to fall as participants reduce exposure or exit positions, which further increases volatility.

Historically, crypto markets have experienced several such cycles since 2009. Each downturn followed a similar pattern of declining prices, fading liquidity, and widespread capitulation. Arkham said these phases test investor discipline and market structure.

Market Behavior During Crypto Downturns

Arkham noted that bear markets change how traders interact with the market. Instead of sustained rallies, prices often decline gradually, interrupted by brief rebounds. These short-lived moves frequently reverse as sellers regain control.

Reduced liquidity during these periods also widens spreads and increases slippage. As a result, price movements can appear sharper even on lower volume. Arkham said this environment contributes to increased risk and emotional trading behavior.

Despite this, Arkham highlighted that several strategies remain active during downturns. These include short selling, options-based approaches, and range trading during sideways phases. Accumulation strategies also appear during prolonged declines, especially near historical lows.

Historical Context and Recovery Patterns

Looking back, Arkham referenced previous crypto bear markets in 2018 and 2022. In 2018, Bitcoin fell to around $3,000 before recovering over the following years. In 2022, prices dropped roughly 76% from late 2021 highs before rebounding in 2023.

Arkham also pointed to on-chain metrics used during past cycles. These include capitulation events, sentiment extremes, and indicators like MVRV Z-scores. Such data helped identify periods when selling pressure began to ease.

According to Arkham, the current cycle remains in its early months. Bitcoin has declined slightly more than 50% so far. The firm did not specify a timeline for recovery.