Analysis: The logic of BTC's cyclical recovery is hard to shake, with losses and panic fully released.

November 8 — Market analyst Murphy published a piece exploring "Will BTC return to a bear market?" Citing the Realized Profit/Loss Ratio Momentum (RPLR-M), he noted that observing periods when the profit/loss ratio accelerates upward or downward under the entity-adjusted metric helps identify trend inflection points. On a larger cycle basis, the most valuable references are how long the red or green zones persist, whether the peak green line is declining, and whether the trough red line is narrowing. Typically, the red line trough is lowest in the early stage of a bear market, indicating that losses are accelerating. After that, prices make new lows but the trough begins to narrow, meaning a new round of decline can no longer force out panic selling of the same magnitude, until eventually it "turns green" — this entire process constitutes one full bear market cycle. From 2018 to 2019, this process lasted about 14 months; from 2021 to 2023, about 13 months; the current round has lasted about 11 months. Judging by the length of time and the narrowing of the red line trough after its initial bottom, enough losses and panic have been experienced to meet the criteria of a cyclical bear market.

Murphy emphasized that in the past, once it "turned green" into Zone B, there was never a precedent of returning to Zone A and starting another bear market cycle. Although Zone B occasionally "turns red" intermittently, such periods are usually short-lived and accompanied by a declining peak green line, i.e., declining profit acceleration. Therefore, regarding concerns that a US stock market crash would push BTC to new lows, the analyst is not so pessimistic.

The analyst also noted that the current correlation between BTC and US stocks has reached 0.8, close to its high since 2020. According to mean reversion, the correlation tends to decline after reaching a certain threshold. If over the long term it is always "US stocks rise, BTC falls; US stocks fall, BTC also falls," how could long-term holders continue to hold about 14 million BTC rather than switching entirely into US stocks? That logic does not hold up over the long term. Rome was not built in a day — despite the twists and turns, each release of panic, exchange of chips, and restoration of confidence is building strength for the next phase of the trend. Of course, historical patterns do not guarantee that the future will necessarily repeat; macro uncertainty remains, and BTC may experience violent fluctuations beyond expectations. But at least based on current data, no evidence has yet emerged sufficient to overturn this cyclical recovery.