The cryptocurrency market is on the verge of a significant upward reversal. This conclusion is drawn from an analysis of the current market dynamics, which I am closely monitoring. A key signal is the duration of the downtrend, which historically coincides with moments of cycle shifts.
My analysis shows that the spot cryptocurrency market has been in a bearish trend phase for about a year. Notably, in previous cycles, such correction periods lasted approximately 370–380 days. This suggests that we are approaching the time mark when the market typically begins to turn around.
Trading Activity Has Bottomed Out
The decline in spot market turnover confirms this hypothesis. In July, trading volume on the 14 largest exchanges fell by 21.7% — from $547.9 billion to $429.0 billion. The decline affected all platforms without exception. Binance retained its leadership with $196.5 billion (45.8% of the market), while Coinbase lost 26.4%, and Bitfinex posted the worst result — down 59.7%.
The derivatives market also contracted by 11.1%, to $3.03 trillion. At the same time, the ratio of futures to spot trades rose from 6.21x to 7.06x, indicating increased use of leverage by traders. The Fear and Greed Index fell to 29 on August 13, reflecting extremely pessimistic sentiment among market participants.
The Macroeconomic Backdrop Is Changing
A turning point in sentiment occurred on August 19. The U.S. Treasury Department doubled its bond buyback volume — to $4 billion or more per operation — and the number of operations per quarter will increase from two to four. Yields on ten-year government bonds fell by 5.7 basis points to 4.647%, while thirty-year yields dropped by 9 points to 5.196%.
In parallel, the possibility of a large-scale bitcoin purchase by the state is being discussed. Since then, the price of the first cryptocurrency has gained about 22% and has settled above $78,000. The Fear and Greed Index has surged to 71, indicating a shift in market sentiment to bullish.
Timeframes for the Bull Cycle
Based on historical data, I see two key factors that will support the reversal. The first is the Senate vote on the CLARITY bill, scheduled for September 15. The second is the period from October to December, which is traditionally strong for bitcoin due to halving cycles that reduce the reward for miners.
"We are almost at the point where people start saying — this cycle is probably ending. So, it's time for the next bull market in crypto," notes the CEO of Coinbase.
In my assessment, there is a high probability that we are on the threshold of a new bull market for spot cryptocurrency trading. The combination of time cycles, macroeconomic signals, and institutional interest creates favorable ground for growth. However, investors should remember that volatility will remain high, and risk management will be a key factor for success in the upcoming period.