Bitcoin's Volatility and Market Sentiment: Has the Bearish Phase Concluded?

Bitcoin's 2025 market cycle has been defined by a dramatic interplay of volatility, institutional adoption, and macroeconomic forces. After a 30% correction from its all-time high of $110,000 to a low of $75,000 in Q3 2025, the question looms: has the bearish phase conclusively ended? To answer this, we must dissect historical crash patterns, on-chain metrics, and macroeconomic indicators to determine whether the current environment mirrors past recoveries or signals a new phase of uncertainty.

Historical Crash Patterns: A Comparative Analysis

Bitcoin's history is marked by cyclical bear markets, each ending with distinct on-chain and macroeconomic signals. The 2018 bear market, for instance, saw an 84% drop from $20,000 to $3,100, driven by regulatory crackdowns and the collapse of Mt. Gox, according to a history of Bitcoin markets. In contrast, the 2025 correction, while severe, has shown divergent dynamics. Institutional adoption-evidenced by increased whale accumulation and spot ETF inflows-suggests a mid-cycle correction rather than a prolonged bear market, according to a CoinRank analysis.

Historically, bear market bottoms have been preceded by on-chain metrics like the MVRV Z-Score and Value Days Destroyed (VDD) Multiple. In Q3 2025, Bitcoin's MVRV Z-Score hit 1.43, a level historically associated with local bottoms in bull cycles (e.g., 2017 and 2021), as noted in the GreenHaus report. The VDD Multiple, currently in the "green zone," indicates long-term holder accumulation, a pattern observed during late bear markets or early bull recoveries. These metrics align with past recoveries, suggesting the 2025 correction may follow a similar trajectory.

On-Chain Metrics: Accumulation and Market Resilience

On-chain data provides critical insights into Bitcoin's current state. The MVRV Z-Score's rebound from 1.43 to 1.8 in late 2025 signals a shift toward healthier bull market dynamics, according to a Bitcoin Magazine analysis. Additionally, the Bitcoin Cycle Capital Flows chart reveals increased activity among 1–2 year holders, mirroring patterns from 2020 and 2021 when institutional investors capitalized on dips.

The Pi Cycle Oscillator, another key indicator, shows renewed bullish momentum, reinforcing the idea that the market is in a recovery phase. However, risks persist. A potential trade war following Trump's 90-day tariff freeze expiration could reintroduce volatility, as Cryptopolitan reported when Bitcoin briefly fell below $102,000 after tariff announcements.

Macroeconomic Indicators: Dovish Policy and Inflation Dynamics

Macroeconomic factors have been pivotal in shaping Bitcoin's 2025 trajectory. The U.S. Federal Reserve's dovish pivot-marked by a 0.25% rate cut in September 2025-has created favorable conditions for risk-on assets, as discussed in the Uptober outlook. This dovish stance, combined with a weakening U.S. dollar and cooling inflation (2.9% annual rate in August 2025), has driven capital into Bitcoin as a hedge against currency debasement.

Institutional adoption via spot ETFs has further stabilized the market. Since their launch in January 2024, ETF inflows have surpassed $14.2 billion as of October 2025, reducing Bitcoin's average daily volatility from 4.2% to 1.8%. This trend mirrors Bitcoin's historical correlation with gold, as both assets have risen amid global economic uncertainties.

However, macroeconomic risks remain. A global recession or equity market downturn could cap Bitcoin's rally, while regulatory uncertainties-such as the EU MiCA regulations-add complexity to the market's trajectory, as highlighted in Bitcoin Magazine's coverage.

Market Sentiment: Fear, Greed, and Contrarian Opportunities

Bitcoin's Fear & Greed Index reached an extreme low of 27 in October 2025, signaling widespread fear. This follows a pattern seen in April 2025 and April 2022, where such fear levels were followed by recoveries. Analysts argue that extreme fear often precedes contrarian buying opportunities, as seen in historical cycles.

Despite this, institutional confidence remains high. Analysts like Ash Crypto and Standard Chartered predict Bitcoin could reach $150,000–$200,000 by year-end 2025, citing ETF inflows, post-halving supply dynamics, and a weakening dollar, according to CoinGecko forecasts. Technical indicators, including a golden cross of the 50-day and 200-day EMAs, further support a bullish outlook.

Conclusion: A Cautious Bull Case

The evidence suggests the bearish phase of 2025 may be concluding. On-chain metrics like the MVRV Z-Score and VDD Multiple align with historical bull market recoveries, while macroeconomic factors-dovish Fed policy, ETF inflows, and inflation moderation-provide a strong foundation for growth. However, risks such as trade wars, regulatory shifts, and macroeconomic shocks remain.

For investors, the current environment presents a nuanced opportunity. While the data supports a potential resumption of upward momentum, prudence is warranted given the market's inherent volatility. As Bitcoin enters Q4 2025, the focus will shift to whether institutional adoption and macroeconomic stability can outweigh lingering risks-a test that will define the next chapter of its cycle.