Bitcoin has recently experienced a significant price correction, falling to around $85,000 and sparking concerns among investors about the potential onset of a bear market. This downward trend marks a sustained period away from its all-time high, with several key technical indicators suggesting that the cryptocurrency could be entering a more prolonged bearish phase.
Signs of a Bearish Shift
Having spent 46 days away from its all-time high and eight days below the $100,000 threshold, Bitcoin's current valuation at $85,975 is raising red flags. A crucial indicator, a repeating fractal pattern, which has accurately predicted the last three bear markets, now suggests Bitcoin has once again entered this bearish cycle. This pattern, alongside growing losses for buyers who entered the market in the last 14 months and a staggering 96% of derivatives traders on platforms like Hyperliquid experiencing losses, underscores the prevailing negative sentiment.
Reinforced Downward Tendency
The likelihood of Bitcoin remaining in this downtrend is further strengthened by the Delta Growth Rate turning negative. This metric, which compares market capitalization growth to realized capitalization growth, indicates that Bitcoin is losing support relative to its on-chain value. Historically, this condition often leads to a broader downward trajectory, even if prices move sideways temporarily. Furthermore, the Taker Buy/Sell Ratio reveals that sellers currently dominate the market, having driven a negative volume of $92 million in just 24 hours, intensifying the downward pressure.
The Critical Support Level
Amidst these bearish signals, the True Market Mean stands out as Bitcoin's final critical support level. Positioned at $81,900, this indicator represents the average purchase price of Bitcoin across the market. Maintaining above this level could mean the market remains mildly bearish; however, a decisive breakdown below this zone could expose Bitcoin to a far deeper and more severe correction, potentially mirroring the intensity of the 2023 bear market. The True Market Mean is, therefore, a pivotal benchmark determining the immediate future trajectory of Bitcoin.
