Bitcoin Drops Below $80K, Ethereum Holds On: Bull Market Pullback or Bear Market Start?

Crypto markets have been volatile in recent days, with Bitcoin falling below $80,000 and Ethereum holding onto $2,100. However, Jason Yanowitz, co-host of the Empire roundup, believes that this is not the start of a bear market, but rather a simple pullback in an ongoing bull market.

Yanowitz gave a 20-30% chance that the current market conditions could mark the end of the four-year cycle, but he is more convinced that it is merely a bull market pullback, with an 80% chance. He cited the 56% pullback that Bitcoin experienced in 2021 as an example, noting that other cryptocurrencies such as Ethereum and Solana also experienced significant drawdowns during that time.

Yanowitz's perspective is supported by recent reporting, which suggests that pullbacks are a normal part of the market cycle and are not a sign of a permanent downturn. While these periods can be anxiety-inducing, they are not forever, and investors should keep calm and carry on.

Meanwhile, the Securities and Exchange Commission (SEC) issued a statement on memecoins, which was characterized as a mixed bag. On the one hand, the SEC put the Howey test to work without a lawsuit, providing clarity to the industry. On the other hand, the SEC's new stance suggests that the industry may need to self-regulate, leaving memecoins open to potential fraudulent conduct.

The SEC's determination on memecoins based on the Howey test comes at a time when memecoins are starting to slow down naturally, which could point to a focusing of market momentum elsewhere. While memecoins may not be akin to baseball cards, they can be compared to slot machines or penny stocks with no fundamentals. If people want to put their money into memecoins, they should be aware of the risks involved.

Investors should hope for a flight to higher quality tokens backed by fundamentals, which could help the market recover and continue its upward trajectory.