Real Bullish Momentum or Just a Dead Cat Bounce? Only Time Can Confirm.

Is the Recent Market Surge a Real Turning Point or a Classic Bear Market Rally?

The markets’ sharp rebound on Wednesday left many wondering: is this the start of a new bull run, or just another fleeting bear market rally?

Stocks soared with the S&P 500 posting its largest gain since the 2008 financial crisis, while bitcoin (BTC) and other major cryptocurrencies made significant strides, bolstered by President Trump’s unexpected announcement of a 90-day tariff pause for most countries, excluding China.

Optimism spread quickly, with social media buzzing about the potential for an extended rally in both stocks and crypto. However, some analysts, including those from Goldman Sachs, caution against getting ahead of ourselves. According to their analysis, rallies of this magnitude are not uncommon in bear markets and can often be short-lived.

Goldman’s strategists pointed out that bear market rallies occur frequently due to “light positioning” and “marginal changes” in factors like sentiment and policy. Since the 1980s, there have been 19 global bear market rallies, averaging a 10%-15% return over 44 days.

Topdown Charts’ Callum Thomas echoed these concerns, referencing the multi-rally bear market of the 1930s. “We’ve seen similar rebounds before, only to see them fade as the broader downtrend resumed,” Thomas noted on X. “Could this 90-day rally be another example?”

What’s key to note, according to Goldman, is that the markers of a true market bottom — such as attractive valuations, extreme negative sentiment, and easing macro conditions — are still absent. The Federal Reserve is not expected to provide any significant support, and Trump’s tariff pause is only temporary, leaving the door open for renewed trade tensions with China.

In short, while the current rally is certainly impressive, whether it signals a long-term recovery or just another chapter in a prolonged bear market remains to be seen.

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