Bitcoin Hits $85,000 and Nears 8-Month High. Is the Crypto Bull Market Finally Here?

After a difficult year that at one point saw the world's largest cryptocurrency down nearly 34%, Bitcoin (CRYPTO:BTC) has now clawed back much of those losses.

As of 8:40 a.m. ET today, the token traded above $85,070, nearing its highest level in eight months.

Despite a favorable regulatory backdrop, crypto investors seemed to lose interest earlier this year, perhaps due to the allure of artificial intelligence and other new emerging technologies.

The token also struggled for much of the Iran war, which has partly contributed to soaring bond yields. But with the strong bounce-back, many are now wondering whether the crypto winter has ended and a crypto bull market has arrived.

Image source: Getty Images.

Evidence that the worst may be over

Given the sector's momentum when President Donald Trump took office, I think the crypto winter caught many by surprise.

Trump appointed pro-crypto regulators, ordered the creation of a U.S. Strategic Bitcoin Reserve, and issued other orders, such as allowing people to invest retirement funds in alternative assets like crypto. Not to mention a strong broader market.

Trump also pushed Congress to pass crypto legislation that would clear up regulatory gray areas that had been giving the sector headaches.

While Republicans haven't been able to pass every piece of crypto legislation they wanted, they did pass the GENIUS Act, establishing a regulatory framework for stablecoins.

"So I think we had this unusual situation where you had a cyclical decline in prices even as you had a secular improvement in fundamentals. And now I suspect that prices are going to catch up toward the end of the year," Bitwise Chief Investment Officer Matt Hougan told CNBC. "I think this will actually be the strongest and longest-running bull market in crypto's history."

Bitcoin and other cryptocurrencies are difficult to value like traditional stocks because they don't generate earnings and free cash flow.

But Wall Street analysts and market strategists are also becoming bullish on technical fundamentals.

Analysts at the firm BTIG wrote in a recent research note that if Bitcoin can hold the $75,000 threshold, bullish investors will be able to push through $82,000 on the way to $90,000.

The crypto publication CoinDesk also reported that Bitcoin closed last week above its 50-week moving average for the first time in over 11 months.

The crypto research firm Galaxy also looked back at major Bitcoin slumps since 2011 and found that during these slumps, Bitcoin ended the week above its 50-week moving average 13 times. In 11 of those circumstances, the token did not hit a new low.

Has the crypto bull market finally arrived?

As I've said in previous articles about crypto, making near-term calls is extraordinarily difficult, probably even tougher than making a near-term call on a traditional stock.

So it's tough to say with any certainty whether the crypto bear market is over and a bull market is now underway. However, I will say that the regulatory environment is much better for crypto than in recent years before Trump.

I am still skeptical about many cryptocurrencies, but I also think a handful are worth a look from a long-term investing perspective.

Bitcoin is viewed by many as a form of digital Gold, with a finite supply of 21 million tokens, that could serve as a long-term hedge against inflation and currency debasement.

Ethereum is the go-to network for smart-contract functionality and decentralized finance, with the majority of stablecoin transactions taking place on the network.

Another one to look at is Solana, which arguably has the strongest technical network, given its ability to potentially process tens or hundreds of thousands of transactions per second.

Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.