Morgan Stanley strategist Sheena Shah has reflected on the past bull and bear crypto cycles in an attempt to figure out whether the current bear market is over or not.

The strategist reminds investors that past cycles were mostly fueled by price speculation, rather than fundamental reasons and the last bull cycle “was no different.”

“For this crypto cycle to find a bottom, we would look for fiat money supply contraction expectations to turn expansionary again or for crypto companies to increase crypto leverage again. A major difference between this cycle and prior cycles is the high involvement of crypto institutions versus historically a much higher involvement of retail participants,” Shah told clients in a note.

Shah added that it is “hard to say whether the bear market is over or that there is more to come.” This is because the crypto market is highly correlated to the U.S. stock market with both remaining sensitive to aggressive central bank tightening.

The strategist also noted the Bitcoin price’s correlation to the halving cycle. The next halving event is expected to take place in April 2024.

“We do not know if bitcoin prices have bottomed for this particular halving cycle. If they did bottom in June 2020 around $17.5k then bitcoin would be moving into the third phase of the cycle, the halving trough to next halving,” Shah added.

Bitcoin price is down over 2% today.

By Senad Karaahmetovic