Bitcoin rebounds after a dip into bear-market territory. Are buyers coming back for crypto?

Bitcoin rose Friday afternoon after the largest cryptocurrency repeatedly dipped into the bear-market territory earlier this week.

The benchmark token BTCUSD rose 2.9% to trade at around $103,781 Friday afternoon, at last check — about 18% below its record high of $126,272.76, reached on Oct. 6. Bitcoin tested bear-market territory several times this week, after falling below the $100,000 mark on Tuesday, according to the Dow Jones Market Data.

A bear market is typically defined as an asset or index declining by at least 20% from a previous peak, based on closing levels. Bitcoin trades 24 hours a day, seven days a week, but some analysts use 4 p.m. to mark the end of a given trading day. Based on this, bitcoin has fallen 5.6% this week, according to FactSet data.

Bitcoin’s weakness, coupled with a selloff in highflying momentum plays in the stock market, has sparked concerns about whether investor appetite for these trades might be waning.

The weakness in bitcoin was making some on Wall Street nervous, given its reputation as a leading indicator for more speculative corners of the equities market.

“I don’t want to give the impression that we are in panic mode here by any stretch of the imagination, but what we are seeing is some of the very durable buy-the-dip areas of the market are acting differently today than we’ve seen in other parts of the year on a relative basis, and that is notable,” Mark Hackett, chief market strategist at Nationwide, said in a Friday phone interview.

“Up until the last couple of weeks, any reasonable degree of pullback in bitcoin or this group [of popular tech stocks like Meta Platforms Inc. META and Nvidia Corp. NVDA] would have been aggressively bought, and we’re not seeing that now,” Hackett said.

Hackett said he remains bullish on stocks — citing friendly seasonality factors, strong earnings and another potential interest-rate cut from the Federal Reserve in December as possible tailwinds into year-end. But he is closely watching whether investor sentiment has shifted. For now, “it’s too early to say that there’s been a paradigm shift in how investors are acting,” he added.

Read: Where next for Big Tech stocks? Pay attention to bitcoin, says Citi.

U.S. stocks recorded sharp weekly declines on Friday, though they ended off session lows. The Dow Jones Industrial Average DJIA ended the week 1.2% lower and the S&P 500 SPX was off about 1.6%. The Nasdaq Composite COMP closed the week down 3%, logging the index’s biggest weekly decline since President Trump’s “liberation day” tariffs were announced in April.

Increased skepticism around the artificial-intelligence buildout and tech valuations has been weighing on risk assets including stocks and bitcoin, Hackett noted.

Other uncertainties in the macroeconomic environment have also had an impact, Gerry O’Shea, head of global market insights at Hashdex Asset Management, said in a phone interview. In particular, some investors have been worried about the economic blowback from the ongoing U.S. government shutdown, which started on Oct. 1 and on Wednesday became the longest shutdown in history.

Bitcoin is much more volatile than traditional assets like stocks, so pullbacks of 20% or greater should be expected to happen more frequently, strategists noted.

Since 2014, bitcoin has entered a bear market on 36 occasions, while the S&P 500 has entered a bear market only twice, according to Dow Jones Market Data. Meanwhile, bitcoin often saw pullbacks of over 50% in its previous bear markets, with its largest peak-to-trough drop reaching over 62% during its 2022 bear market. By comparison, since 2000, the S&P 500 has only seen one bear market over 50%, as the index fell 51.9% during the 2008 financial crisis.

Still, bitcoin’s break below $100,000 earlier this week may prove to be a warning that the selloff isn’t over yet, said Louis LaValle, chief executive at crypto investment firm Frontier Investments.

That threshold marked an important support level, which has now been broken. That could mean bitcoin may fall below $70,000 in the not-too-distant future, LaValle said.