Bitcoin's Silent Bear Market: Data Suggests a Two-Month Slide is Already Underway
Contrary to popular perception, Bitcoin may have already been in a bear market for the past two months. This assessment comes from CryptoQuant's head of research, Julio Moreno, whose analysis of key technical indicators suggests the cryptocurrency's decline is not as recent as many might believe. His findings point to an earlier shift in market sentiment, signaling a prolonged period of downward pressure.
Deep Dive into Bitcoin's Technicals and Price Expectations
Current Market Slide and Potential Bottom Moreno highlights the significance of Bitcoin's price falling below its one-year moving average, a crucial technical confirmation of a bear trend. He projects a potential bottom for Bitcoin within the $56,000 to $60,000 band, based on the asset's realized price. While this would represent a substantial 55% drawdown from Bitcoin's all-time highs, Moreno notes that this decline is less severe than historical crashes which often saw 70% to 80% corrections. This suggests a more controlled descent, potentially cushioning against extreme volatility. Derivatives Market Shows Caution Further corroborating the bearish outlook, data from the derivatives market reveals a 39% decrease in trading volume, even as open interest remains relatively flat. This combination indicates a hesitant market where traders are not aggressively placing new bets but rather maintaining existing positions. Price compression around support levels and lower-than-expected volatility, especially ahead of options expirations, reflect this cautious approach, with traders closely monitoring these events for potential larger price movements.
Institutional Resilience Amidst Market Downturn
Steady Institutional Accumulation A notable difference in the current market landscape compared to previous downturns is the consistent demand from large institutional players and regulated Bitcoin ETFs. These entities have been steady buyers, preventing the kind of cascading failures witnessed during the 2022 market collapses of Terra, Celsius, and FTX. This underlying institutional support suggests a more structurally sound market, even as prices adjust. Macro Outlook and Future Direction Looking ahead, some analysts still foresee fresh highs for Bitcoin in 2026, driven by anticipated US rate cuts and a potentially more crypto-friendly regulatory environment in Washington. However, the future trajectory of Bitcoin also hinges on its evolving correlation with traditional US stock markets. A weakening of this correlation could allow Bitcoin to chart its own course, independent of broader market movements, while a strong link means its path would be largely influenced by wider economic and policy decisions. Traders are advised to monitor the one-year moving average, the $56,000-$60,000 realized price range, options expirations, and the sustained buying activity of institutional investors as key indicators.
