Analyst: Bitcoin Parabolic Rally Era May Be Over, Market Maturing

BlockBeats News, April 1st. Coindesk analyst Omkar Godbole wrote that since early February, Bitcoin has been hovering around $70,000, well below the 2023 to 2025 bull market peak of $126,000. $70,000 represents the historical high point of the 2019 to 2022 market cycle, indicating that the current bear market has retraced to the peak of the previous cycle. This phenomenon is quite rare. During the bear markets of 2014 and 2018, Bitcoin never fell back to the previous cycle's high point; the only exception was in 2022 when the price dropped below the 2017 peak of $20,000, but analysts attributed it to crypto scams and massive deleveraging. The uniqueness of the current retracement is that it occurred in an environment lacking extreme catalysts and merely as a natural part of the bear market cycle fading away.

Each new bull market cycle no longer exhibits parabolic surges, making it increasingly difficult for the price to significantly exceed previous highs, and old highs are no longer untouchable. This is a typical manifestation of the law of diminishing returns: as the price of Bitcoin rises, the capital required to drive the price up also increases. The era of relying on small fund inflows to trigger a major surge is basically history, making price trends more stable and predictable. The advancement of Bitcoin institutionalization and the expansion of the derivatives market have also smoothed out extreme volatility, providing traders with structured tools for volatility, timing, and market direction rather than just betting on price increases. This is in stark contrast to the era before 2020 when trading was largely limited to the spot market, and active participants were often staunch Bitcoin bulls who would buy in on any price dip.

Previous highs often form strong support due to "anchoring bias" — investors who missed the initial breakout tend to buy when the price returns to familiar ranges, providing momentum for the next round of the market, explaining why the recent downtrend has stalled around $70,000. If Bitcoin sees a strong rebound from the current level, it may indicate that the bear market is nearing its end; however, if the law of diminishing returns continues to take effect, the next uptrend may be more moderate, showing a well-ordered trend similar to traditional financial markets rather than the frenzied surges of past speculative epochs.