There are two conflicting theories circulating in the crypto market (when aren't they?). One of them says we are/were in a normal bull market pullback, the other says that the bull market is already over.
There are elements which make them both right and both wrong at the same time. Whichever variant will hold true in hindsight, we will see... Until then, all we can is make some (educated) guesses.
Last bull market was atypical too, but we might not remember it all that well. It is still quite different from what happens during this bull market. I will be analyzing only Bitcoin, but the massacre was in the alt territory. Sure, if the bull market continues, then there is a good chance at the end of it we will have a short but intense alt season. I am inclined to say it continues, but there are certain elements we need to be careful about.
Let's take a look at the Bitcoin chart, with some elements marked on it:
On this chart we can see the resistance that formed at 72k after the pullback from reaching the ATH at 74k, and which was tested 4 times already, never breached.
Until not so long ago, we had support at around 60k (more like a 58k-60k support area), which was breached downward recently. The price moved in range between 58-60k and 72k since March, so for over 3 months.
During that time we had two major pullbacks, one that threatened to break out of range, but didn't in April (during the Bitcoin halving month), and another which probably just ended a few days ago, which went as far down as almost the 52k support line. The first pullback was a -22.5% drawdown, the second one was -25.8%. Both within the 20-30% "normal" drawdowns during bull markets.
Let's take, by comparison, the last cycle. Here's a representation of the pullbacks experienced then:
With blue are marked the ones around 30% or below, with red are market the ones above 50%. Yes, in the previous bull market Bitcoin had a pullback of 51.4% in May 2021. And no, it wasn't the end of the bull market, but it was harsh. Of course, right now alts are struggling at or around their lowest price points of the bull market, while BTC still has over 4x gained, even after the last pullback.
The second red drop marked on the chart, is the actual beginning of the bear market. Notice how many blue pullbacks of up to 30% there were.
So, those blue pullbacks are normal during a bull market.
Where people who call the end of the bull market are right is that before this time, all pullbacks during the bull market happened on an uptrend and, after the drawdown, the price hit a new ATH, after a strong recovery. Now, we've been moving in range for about 4 months. In the previous bull market, this sideways movement only lasted for 2 months (end of May, June, and most of July). And pullbacks don't end with higher lows and higher highs.
This may be a short-sighted vision looking at the near term movements, and ignoring the time of year we are in and that most people expect a push for new ATH to start in the fall, but we will see how things happen.
What we know is that smart money seem to accumulate (Bitcoin ETF inflows pretty high these days), while dumb money sell (one particular government in this category, and we know what great managers governments are).