According to Wall Street veteran and mathematician Fred Krueger, a Bitcoin bear market happens for exactly two reasons. One is when global liquidity becomes negative, that is, the Fed tightens. The second is a forced sale due to shocks specific to Bitcoin (in the case of Mt. Gox, miners, and fraud).
Krueger backs up his claims with numbers, adding that everything else is just noise. Traders define a “bear market” as an asset’s price decline of 20% or more. Therefore, prices are low and are expected to continue falling for a long time.
Bitcoin bear markets occur for exactly two reasons.
1. Global liquidity turns negative (Fed/dollar tightening)
2. Forced sales due to Bitcoin-specific shocks (Mt. Gox, miners, fraud)Everything else is noise.
Let’s examine the data. 1/
— Fred Krueger (@dotkrueger) December 17, 2025
Krueger outlined numerous instances where Bitcoin has entered a bear market and the triggers behind them.
When Bitcoin fell from $32 to $2 in 2011, the 93% drop coincided with the end of quantitative easing, along with a tightening of the dollar. The stock market also entered a stealth bear zone during this period.
From 2013 to 2015, Bitcoin fell from nearly $1,100 to $200, an 85% decline, which coincided with the collapse of Mt. Gox and a large-scale forced sell-off.
From 2017 to 2018, the price of Bitcoin fell 84% from $20,000 to $3,000, coinciding with the beginning of the Fed’s interest rate hikes in tandem with quantitative tightening. Global dollar liquidity has also peaked, but ICO leverage has loosened sharply.
In March 2020, Bitcoin fell from $9,000 to $3,800, down about 60% in a few days, a period that saw global margin calls and dollar shortages.
Bitcoin fell from about $69,000 to $15,500 between 2021 and 2022, a 77% drop that coincided with quantitative tightening and the fastest rate hike in 40 years. A series of internal failures in the cryptocurrency industry, typified by the collapse of Terra (LUNA), 3AC, Celsius, and FTX, led to a series of forced sales in the market.
Are there any exceptions?
Krueger noted that apart from the 2019 pullback, it was a failed bull market, not a bear market. China’s mining ban in 2021 could be seen as a correction rather than a reset of the cycle. And in the 2023-2025 drawdown (we didn’t see any tightening or forced selling), the post-2013 Bitcoin bear market would not have existed without negative liquidity impulses or forced liquidations of overwhelming demand.
Bitcoin has extended a downward trend that began in early October, hitting a series of new lows. At the time of writing, Bitcoin is up 3.21% in the past 24 hours to $90,015, down 28.84% from its all-time high of $126,198 set in October. The leading cryptocurrency had previously fallen to a low of nearly $80,000 in late November.
