No bull: Bitcoin has been in a kangaroo market for nearly a whole year

Bitcoin right now feels like a kangaroo, hopping up and down, wanting to start the bull market again


Artwork by Crystal Le


Bull market truthers would say bitcoin bottomed out at the end of 2022 and we’re destined for a parabolic run sometime after the next halving in April.

That would mean bitcoin has been in a bull market for more than a year. Not true. 

Bitcoin has been in a kangaroo market for nearly as long. 

The unpredictable kangaroo market hops sideways — sometimes aggressively — while bull and bear market trend consistently in one direction. 

No doubt, a kangaroo market sounds familiar to anyone closely tracking the price of bitcoin over the past year. 

Kangaroo markets were made famous by Berenberg strategist Jonathan Stubbs in the aftermath of the Covid market crashes in early 2020.

The S&P had folded almost 40% across February and March before an impressive bounce to new record highs in August. 

Stocks would whipsaw over the next quarter — a potential outcome flagged by Stubbs in a research note months earlier.

The insight had been distilled into a viral meme after Stubbs appeared on a CNBC television segment. 

The three animal spirits of financial markets (source)

Granted, bitcoin has more than doubled since the end of 2022, which certainly sounds like a bull market. 

But most of that action was a simple bounce from Terra’s collapse and the subsequent rolling liquidations that triggered a string of bankruptcies, ultimately leading to the FTX scandal.

One month after Terra’s implosion, Celsius, Three Arrows Capital and Voyager all went bust. Outside of the stress those collapses put on crypto markets, the Federal Reserve had just announced the biggest rate hikes in almost three decades, leading to widespread negative sentiment across both crypto and equities markets — heavily dragging prices.

Bitcoin changed hands for close to $30,000 in June 2022, a month which marked BTC’s worst monthly candle in 11 years. FTX CEO Sam Bankman-Fried’s outing as a multibillion-dollar fraudster triggered a further 20% fall in November, wiping the bulk of the previous bull run off the chart. 

Bitcoin had totally shaken off the FTX crash by the end of January, and had properly reclaimed the $30,000 mark by March, even nearing its pre-Terra price point. 

Recovering from those debacles would signal the beginning of bitcoin’s current kangaroo market: Bitcoin jumped around for the next eight months but went practically nowhere.

Read more: Bitcoin price often drops 20% in bull markets — but it’s becoming less frequent

In fact, most of bitcoin’s gains over the past year came directly after some very fake news. Bitcoin suddenly rallied 10% in October 2023 after Cointelegraph’s X account claimed the SEC had approved BlackRock’s ETF, when in fact no such decision would be made for months. 

One might expect bitcoin would’ve given up those gains once markets found out the post was wrong, as has happened in similar scenarios over the past few years. 

Bitcoin did no such thing. It even rallied another 25% over the next few weeks — and then again by nearly one-third leading up to the real bitcoin ETF launch earlier this month. But bitcoin then proceeded to dump by up to 21% in a classic “buy the rumor, sell the news” event from which it’s yet to fully recover. It has been hopping up and down ever since — like a kangaroo. 

Major “sell the news” events are earmarked by steady accumulation before a sudden crash after a highly anticipated date — and rarely say much about which type of market we’re in.

Bitcoin is here, in a kangaroo market

To be clear, there are no formal definitions for “kangaroo market” (although “bull” and “bear” definitions are similarly vague). 

VIX, the benchmark volatility index for stocks, had just skyrocketed due to the Covid crashes when Berenberg’s Stubbs popularized the term three years ago. Volatility kept relatively high for much of the following year, during which time the S&P 500 went mostly sideways — hence the whole kangaroo thing back in 2020.

Bitcoin’s historic volatility, meanwhile, has generally trended down over the past few years and hasn’t seen any spikes on par with the VIX around Covid. Still, historical bitcoin volatility has now been rising since September. 

Stubbs later explained that the kangaroo market had much to do with valuations being pulled from all sides: Downside risks outside of COVID such as tensions over Brexit, the Trump-Biden presidential race and strained US-China relations kept prices down, while bloated supply chains threatened revenues and flared credit risks across the global economy.

“But then you have this historic support of central bank liquidity from what I call QE plus, which is a [combined support mechanism of] fiscal and monetary support. You have vaccine hopes coming through and let’s not forget, we do have a pathway to recovery, albeit one with risk […]

So markets are kind of trapped in the middle and kangaroo along until we have this decisive break in either direction.”

Bitcoin is likewise trapped right now: Spot bitcoin ETFs may have opened it up to previously untapped liquidity, but that has yet to convert to higher prices — even though BlackRock, Fidelity, Bitwise and others have collectively bought billions of dollars in bitcoin over the past three weeks.

Whether they intended to or not, those funds (like the central banks in Stubbs’ scenario) have played critical support at a time of major liquidation threats: The FTX estate was busy pulling $1 billion in bitcoin from Grayscale’s flagship trust during the spot ETF’s first week. 

Theoretically, those FTX flows could have contributed to even lower prices had the other spot funds not experienced billions in inflows on their own.

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Bitcoin veteran Adam Back, like everyone else, wants to know how Mt. Gox repayments will impact prices

Now, sometime over the next two months, Mt. Gox’s estate is set to distribute upwards of 138,000 BTC ($5.87 billion) to nearly 130,000 creditors, who have been waiting a decade to receive their money back. 

Bitcoin’s price has multiplied by more than 50 times, leading to speculation that many would be eager to sell their bitcoin as soon as possible, pushing prices lower. 

Mt. Gox payouts are set to come just ahead of the next halving, which cuts block rewards by 50% and radically shifts the economics of bitcoin mining. 

Read more: Bitcoin halving expected to hit on 4/20

Mining operations writ large may face stress tests should bitcoin fail to rally in the year or so after the halving, and especially so if bitcoin falls significantly from here. If that happens, miners could be inspired to sell some of their treasuries to make ends meet. Miners altogether hold about 10% of the circulating supply, equal to around $80 billion.

All this while US stocks firmly enter a bull market, with the S&P 500, the Dow and the Nasdaq 100 all hovering at record highs. 

Bitcoin could soon be left wishing for even closer correlation with the US stock market if this kangaroo market keeps up.

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