Bitcoin Seasonality: Caution in AugustBitcoin all time history indexINDEX:BTCUSDSwissquoteSince its low of US$57,750 on July 1, Bitcoin has regained positive momentum. This rebound comes as no surprise, as July has historically been one of the cryptocurrency's strongest months from a statistical standpoint. The key question now is whether this recovery still has meaningful upside potential or whether it is already approaching exhaustion. 1) The bear market may not be over yet The most optimistic scenario assumes that the July 1 low already marked the definitive bottom of this bear market cycle. While this is an attractive hypothesis, several long-term indicators still call for caution. The first is simply the average duration of previous Bitcoin bear markets. Historically, a cyclical bear market has lasted around 365 days. On July 1, the current decline had lasted only about 260 days, significantly shorter than the historical average. By the end of July, this cycle has now reached approximately 295 days, representing about 81% of the average duration of previous cyclical bear markets. The second indicator is the Bitcoin Sharpe Ratio, one of the most reliable tools for identifying the end of a bear market. Previous cycles show that the bullish reversal signal occurs when this indicator falls below -1.50 and then crosses back above that level. At this stage, the Sharpe Ratio is indeed trading in a zone that has historically been associated with market bottoms, but it has not yet confirmed this technical signal. The chart below displays Bitcoin's weekly candlestick chart alongside the historical average duration of cyclical bear markets (365 days). The 2026 bear market cycle is now approximately 81% complete. 2) A setup reminiscent of the summer of 2022 Bitcoin's current price action shares several similarities with the pattern observed during the summer of 2022, in the previous bear market. If this historical comparison continues to hold, the current recovery could extend until around August 10, before giving way to one final corrective wave that would establish the true bottom of this cycle. This scenario is also consistent with seasonal statistics. While July has historically been favorable for Bitcoin, August and September rank among its weakest months. The table below (source: Coinglass) shows Bitcoin's historical monthly performance. It includes both the average monthly return and the median monthly return. 3) One final consolidation phase remains possible Against this backdrop, Bitcoin could soon enter another period of weakness as mid-August approaches. Although the long-term trend remains constructive, the market may still need to build a genuine accumulation zone before launching a sustainable new bull market. During previous cycles, this transition phase consisted of several weeks of sideways trading, allowing buyers to gradually regain control. A similar scenario would imply a stabilization range between US$50,000 and US$60,000 before a new bullish cycle can truly begin. DISCLAIMER: This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions. This content is not intended to manipulate the market or encourage any specific financial behavior. Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. 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