Bitcoin exchange River published a newsletter on August 20 asking whether the current bear market has already ended, after bitcoin surged 12% over two days to hit $72,000—its highest price in nearly three months.
What drove the rally
River pointed to three factors behind the move.
First, the US Treasury announced it would double the size of long-term government debt buybacks to at least $4 billion per month, which River described as:
“A subtle form of yield-curve control, in which the government fixes the interest rates it pays on debt by printing money.”
Hard assets like gold and bitcoin rallied immediately after the announcement.
Second, more than $1.2 billion in short positions were liquidated in just 60 minutes as the price spiked.
Third, River highlighted seller exhaustion, noting that between May and July, ETFs sold more than 90,000 bitcoin while long-term holders have sold over 2 million bitcoin over the past 24 months:
“Most investors who planned to sell during the bear market have likely already done so. In this environment, a small amount of buy pressure can create large upswings in price.”
Comparing this cycle to history
River noted that the average bitcoin bear market lasts 382 days with an 82% drawdown.
The current bear market is 318 days old with a 42% decline—far shallower than previous cycles.
If the bottom is already in, it occurred on June 30 at $58,000, just 267 days after the all-time high.
River argued that bitcoin’s declining volatility supports this thesis:
“Last year’s bull market was less extreme than previous cycles, which may suggest a shallower bear market.”
The macro backdrop
With US federal debt now past $40 trillion and inflation averaging above 4% for over five years, River said the environment favors sound money:
“Politicians and the Federal Reserve both appear content to let these issues continue. This is an environment that favors sound money.”
Still, River cautioned that bitcoin operates on its own timeline:
“There is no need to rush, chase gains, or speculate about its short-term price movements. What matters is that the fundamental thesis is unchanged: Bitcoin, as a scarce, decentralized digital asset, is still the antithesis to money printing by governments and central banks.”
