BlockBeats News, April 1st: Coindesk analyst Omkar Godbole wrote that since early February, Bitcoin has been hovering around $70,000, far below the 2023 to 2025 bull market high of $126,000. $70,000 marks the historical high of the market cycle from 2019 to 2022, 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 high of the previous cycle; the only exception was in 2022 when the price dropped below the 2017 high of $20,000, but analysts attributed it to crypto scams and large-scale deleveraging. The particularity of the current retracement is that it occurred in an environment lacking extreme catalysts, merely as a natural part of the bear market cycle’s fade-out.
Each new bull market cycle no longer shows a parabolic surge, making it increasingly difficult for the price to significantly surpass previous highs, as old highs are no longer untouchable. This is a typical manifestation of the law of diminishing returns: as the price of Bitcoin gets higher, the capital required to drive the price up also increases. The era of triggering sharp price increases through small fund inflows has basically become history, making the price trend more stable and predictable. The advancement of Bitcoin institutionalization and the expansion of the derivative market have also contributed to the stabilization of extreme volatility. Traders now have structured tools for volatility, timing, and market direction, rather than just betting on price increases. This is drastically different from the period before 2020 when trading was mostly limited to the spot market, and active participants were often staunch Bitcoin bulls who tended to buy in on minor price pullbacks.
Old highs often form strong support due to “anchoring bias” — investors who missed the initial breakout tend to buy when the price returns to a familiar range, providing momentum for the next round of the market. This also explains 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 coming to an end. However, if the law of diminishing returns continues to apply, the next upward trend may be more moderate, showing an orderly trend similar to traditional financial markets, rather than the crazy surges of the speculative era.
