The cryptocurrency is up roughly 30% from its most recent low

Bitcoin, along with cryptocurrency rivals, may be awakening from a slumber.

After a long, painful downdraft that erased more some $2.2 trillion in value, cryptocurrencies - and, notably, bitcoin - have come roaring back this week. Does this mean the bull market in crypto is back on?

Up 21% since Monday, bitcoin (BTCUSD) is headed for its best weekly return since a 23% gain in March 2024, according to Dow Jones Market Data. Friday's action saw bitcoin, up for a fifth day in a row, climb 7.3% to reach $77,917, its best level since May. Bitcoin is on the cusp of its longest winning streak since May 5, when it saw six straight gains. Bitcoin has now gained nearly 30% from its most recent low at around $60,000 a coin - enough to get the crypto bulls excited.

Traders have credited a strong week for bitcoin and other cryptocurrencies to a couple of events: President Donald Trump's support for a crypto-bill initiative and the U.S. Treasury's move to buy back longer-term bonds.

"We are not macro experts, but we do know bitcoin historically has had a positive reaction to liquidity expansion. And this year's apathy toward bitcoin and crypto markets was a combination of tighter markets post Iran conflict, with rising risks of inflation and a very strong AI/semis trade pulling all the liquidity away," a team of analysts at Bernstein led by Gautam Chhugani told clients in a note on Friday.

As the hyperscalers continue to seek funding for their vast AI ambitions and increasingly tap debt markets, investors may turn to hard assets as a hedge, including bitcoin, said Chhugani and his team. Bitcoin may be a form of digital money, but its code guarantees a fixed supply, taking debasement off the table.

At the lows of this latest bear market, bitcoin had seen the erasure of more than 50% of its value compared with its October 2025 record high above $126,000.

"The question is no longer how much further bitcoin could fall but whether a roughly 50% correction has already stripped out the excess of the previous rally, and whether historical bear-market templates still apply to a market whose regulation and ownership are changing," said Dovile Silenskyte, director of digital-assets research at WisdomTree.

Given that bitcoin has repeatedly suffered peak-to-trough drawdowns that last longer than traditional markets can stand, he cautions against assuming the bottom is in.

However, he noted the pullback occurred in a far more mature ecosystem - clearer regulation, more participation by institutions and further build-out of digital-asset infrastructure. As well, institutions may not be trying to trade every crypto move, as was seen in earlier cycles with retail and crypto-native investors.

"To the extent they accumulate rather than recycle supply back into the market, the bitcoin available to meet new demand tightens," he said.

Silenskyte said it's important to remember that spotting a market bottom is tough and buying opportunities often emerge earlier when sentiment is low and prices have had a reset, but fundamentals point toward recovery.

"Macro conditions, liquidity and positioning can overwhelm fundamentals, and bitcoin could fall well below current levels without invalidating its longer-term investment case," said Silenskyte.

The broader crypto market has dropped to $2.2 trillion in aggregate valuation from $4.4 trillion, with major digital assets logging three straight quarters of losses, Silenskyte said, citing data from the crypto analytics platform Artemis Terminal.

Ethereum (ETHUSD) was looking at an even stronger bounce than bitcoin over its own five straight sessions of gains. With a rise of 26% so far on the week, Ethereum is headed for its best weekly performance since the week ending Jan. 8, 2021, when it jumped 63%, according to Dow Jones Market Data.

-Barbara Kollmeyer