After Bitcoin's high retreat, analysts say this round of adjustment may be "one of the healthiest bear markets". Key indicators release signals of bottom formation.

Despite the recent pressure on Bitcoin, with a drop of over 50% from its high in October last year, the price briefly fell below $60,000. Anthony Pompliano, Chairman and CEO of ProCap Financial, believes that this round of correction may be one of the "healthiest bear markets" in Bitcoin history, and the market bottom may be gradually approaching. As of now, the price of Bitcoin is around $61,800, with a cumulative drop of over 30% for the year. For hodlers, this round of correction is undoubtedly very painful. However, Pompliano stated that compared to several previous cycles, this round of bear market has shown distinct characteristics. Pompliano said in an interview: "In the past, Bitcoin bear markets often saw drops of over 80%. Although this time the drop is over 50%, the overall market performance is significantly more stable." He believes that with institutional investors continuing to enter the market, Bitcoin's volatility is gradually decreasing. "I do think that the decline in this Bitcoin bear market is becoming shallower, which also means that the volatility of the entire asset is gradually decreasing." In recent years, the approval of Bitcoin spot ETFs and the accelerated participation of traditional Financial Institutions, Inc. in the cryptocurrency market are considered important factors driving market maturity. Key indicators show the market may be approaching the bottom Pompliano specifically mentioned an important indicator that many on-chain analysts consider, the number of Bitcoin currently at a loss. He cited research by cryptocurrency analyst Benjamin Cohen, which showed that the number of Bitcoin at a loss in the market has exceeded the number in profit. Historically, when the majority of holders start to incur losses, it often indicates that the market is approaching the bottom of the bear market. "This is usually a fairly reliable signal that the market is not far from the bear market bottom." He pointed out that more and more long-term investors are choosing to gradually accumulate Bitcoin in the current price range, rather than continue to sell. "The 'four-year cycle' is still in play" For a long time, the Bitcoin market has been characterized by the so-called "four-year cycle" theory, where prices typically revolve around the halving cycle and enter a period of correction for about a year after experiencing a significant increase. With the increasing proportion of institutional investors, the market has questioned whether this rule is still valid. However, Pompliano believes that this round of trends actually further confirms the existence of this cycle. "Bitcoin peaked around October last year and then entered a correction phase, which is very similar to several previous cycles." In his view, the current market trend is making more investors re-believe in the effectiveness of the four-year cycle. The delay in Fed rate cuts brings short-term pressure Recently, one of the main pressures facing Bitcoin comes from the US interest rate environment. With the ongoing strength of the US job market and inflation exceeding expectations, expectations for rate cuts by the Federal Reserve are constantly being pushed back, and even the possibility of future rate hikes is being discussed. High interest rates typically weaken investor interest in high-risk assets, including cryptocurrencies, causing a negative impact on risk assets. However, Pompliano believes that these factors are more short-term disruptions. In the long run, he remains optimistic about the development prospects of Bitcoin. Bullish on the long-term value of Bitcoin and gold Pompliano stated that the core logic that drives his long-term optimism for Bitcoin has not changed. He believes that the continuous expansion of the US fiscal deficit and the ongoing rise in government debt will ultimately lead to a long-term decline in the purchasing power of the US dollar. "The government cannot stop printing money. If the dollar continues to devalue, people will eventually look for assets that can store value." In this context, he believes that both Bitcoin and gold will benefit. "Both Bitcoin and gold should perform well in the long run." In addition, regarding market concerns that high-leverage institutions holding large amounts of Bitcoin may be forced to sell assets, Pompliano stated that large institutions, including Strategy(MSTR.US), still have sufficient cash reserves to meet debt and dividend obligations and do not need to raise funds by selling Bitcoin. Pompliano concluded by saying that the large-scale monetary stimulus during the COVID-19 pandemic has made more and more young investors start to pay attention to the risk of currency devaluation. He believes that this idea has deeply influenced the asset allocation thinking of a generation of investors. "The pandemic has made many people realize for the first time that the purchasing power of currency will be diluted." Pompliano expects that in the coming decades, regardless of short-term market fluctuations, funds will continue to flow into inflation-resistant assets such as Bitcoin and gold. In his view, this long-term trend will become an important force supporting the value of Bitcoin, and the current market adjustment is more like normal fluctuations in a new cycle, rather than the end of the logic of a long-term bull market.