Bitcoin's Recent Plunge Below $80,000: A Deeper Bear Market Warning, Not Final Capitulation
Recent market movements have seen Bitcoin (BTC) drop significantly, pushing its price below the critical $80,000 mark. However, on-chain analytics firm Checkonchain suggests this is not the ultimate capitulation event typically seen at the end of a bear cycle, but rather a deeper progression into it, signaling potential further downside.
Key Support Levels Breached
Bitcoin's latest bearish action has led it to breach two crucial on-chain cost basis levels, triggering widespread market pain. Initially, the cryptocurrency fell below the ETF Cost Basis, which represents the average inflow price for US spot exchange-traded funds (ETFs). This level had acted as a strong support since the latter half of 2024, resisting a previous challenge in late 2025. This time, however, the price cut straight through. Following this, Bitcoin also lost the True Market Mean, a metric tracking the average buying price of the economically active BTC supply. This breach pushed the majority of active Bitcoin investors into an unrealized net loss position, a first since 2023.
Underlying Data Points to Further Bearish Pressure
Despite the significant drawdown, Checkonchain emphasizes that several indicators suggest the market hasn't hit its final bottom. While spot ETFs have experienced substantial negative netflows, these outflows haven't exhibited the panic-driven exodus characteristic of a true cycle-ending capitulation. Similarly, while on-chain losses have increased, they haven't yet reached levels indicative of a full capitulation event. Moreover, data from the futures market reveals that traders are still actively attempting to "catch the bottom," a behavior Checkonchain identifies with "a regime where durable lows rarely form." This speculative activity has resulted in mass liquidations, with over $50 million in long Bitcoin bets wiped out in the past day as the price swung from $79,000 to below $76,500, contributing to a total of $185 million in long position liquidations across the broader crypto market. At the time of writing, Bitcoin is trading around $76,100, reflecting a nearly 14% decline over the last week. The confluence of these on-chain and market data points suggests that while current conditions are challenging, the crypto market may need to endure more pain before a definitive bottom is established.
