Is This the Start of a Bull Market or Just a Bear Market Rebound?
Wednesday’s sharp rally in both stocks and cryptocurrencies has left many wondering whether this marks the beginning of a true bull market, or if it’s merely a short-lived bear market rebound.
The S&P 500 surged with its largest gain since the 2008 financial crisis, while bitcoin (BTC) and other major cryptocurrencies followed suit, climbing on the heels of President Trump’s unexpected announcement of a 90-day pause in tariffs for all nations except China. This fueled speculation that the market was ready for a prolonged uptrend, especially as optimism spread across social media.
But not everyone is convinced. Analysts, including those from Goldman Sachs, caution against getting too excited. They highlight that such rallies are not uncommon during bear markets, especially when market positioning is light, and small changes in market sentiment or policy can cause amplified price movements.
Goldman’s research team pointed out that, since the 1980s, there have been 19 global bear market rallies, which typically last around 44 days and result in a 10%-15% return. The team noted that some of the most brutal bear markets, such as during the 1930s, saw multiple significant rallies before the ultimate market bottom was reached.
While it’s too early to determine whether the recent surge marks the start of a new bull run, Goldman emphasized that several indicators of a sustained market bottom are still missing. Attractive valuations, extreme negative positioning, policy intervention, and signs of a slowdown in macroeconomic deterioration are all absent. Additionally, the Federal Reserve’s reluctance to provide significant support, combined with the temporary nature of Trump’s tariff pause, leaves room for trade tensions to resurface.
In short, the current rally is impressive but whether it signals the beginning of a sustained bull market or simply a brief uptick in an ongoing bear market is still uncertain.
