Post-Cycle Bottom: VanEck’s Perspective

Van Eck told CNBC that Bitcoin prices could gradually recover in 2026. He noted that in recent months, the main driver of BTC’s price was not the coin’s fundamentals but the four-year halving cycle.

“Bitcoin rose for three consecutive years and saw a major drop in the fourth. 2026 is that fourth year. I think we are close to the bottom. No need to overcomplicate it,” said Van Eck.

Analysts remain divided: some point to institutional ETF demand, macroeconomic factors, and regulatory developments, while cycle proponents maintain the classic model is still valid.

Geopolitical Tension and Market Reaction

The recent recovery coincided with rising geopolitical risks as the U.S. and Israel launched airstrikes on Iran. According to Van Eck, during such uncertain periods, crypto payment systems become critical tools for transferring funds outside the traditional banking system. The attacks undermined trust in local banks, leading funds to flow via crypto networks in Dubai and the UAE.

“In a potential Iran settlement, how will money be transferred? Regions like the UAE and Dubai are crypto-friendly. Using crypto instead of Iranian banks makes sense,” Van Eck explained.

Futures, Open Interest, and Institutional Activity

Demand for Bitcoin futures has dropped to its lowest since 2024. CME open interest shows that major institutions have not exited the market.

• After testing $63,000 on Saturday, BTC rose 10% to $70,000.
• Total futures open interest fell to $32 billion, down 20% from a month ago.
• Leverage demand has significantly decreased since the all-time high of $126,200 in October 2025.
• Options premiums are around 0.7, with put demand lower than call demand, indicating stable conditions aside from short-term stress.

Institutional Adoption Continues

Despite seemingly intimidating derivatives data, the other side is encouraging. While Bitcoin’s performance against gold and equities is low, spot BTC ETFs see average daily volumes exceeding $3 billion. Public companies such as Strategy (MSTR US), MARA Holdings (MARA US), XXI (XXI US), and Metaplanet (MPLTF US) hold over $79 billion in BTC on-chain.

Countries including Bhutan, El Salvador, and the UAE continue investing in Bitcoin, demonstrating that institutional adoption is far from zero and market confidence has not entirely eroded.

Bottom and Market Resilience

Although the absolute bottom of the current cycle is unclear, Bitcoin’s fixed supply and the $1.4 trillion crypto market demonstrate resilience. Despite selling pressure and geopolitical chaos, the ecosystem remains standing. Whether $60,000 marks the ultimate bottom will be revealed over time.

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Understanding the 40% Price Decline

Bitcoin’s drop from its peak near $126,000 to the $75,000 range represents a decline of roughly 40%. While such a move appears severe at first glance, Pompliano argues that context is critical. In previous market cycles, Bitcoin regularly experienced drawdowns of 70% to 80% during full-fledged bear markets. From this perspective, today’s correction may not fit the traditional definition of a bear phase.

A More Mature Asset With Lower Volatility

A key pillar of Pompliano’s thesis is that Bitcoin has fundamentally evolved. According to his assessment, Bitcoin’s volatility has been reduced by approximately 50% compared to earlier cycles. As volatility declines, so does the magnitude of price swings. This implies that a 40% correction in today’s market environment could be comparable to the deep bear market bottoms of earlier years when volatility was significantly higher.

Institutional Participation Changes the Market Structure

Pompliano emphasizes that Bitcoin is no longer dominated solely by retail investors. Wall Street now plays an active role through spot ETFs, derivatives, and options markets. These instruments allow institutional participants to hedge exposure and implement complex trading strategies, which in turn dampens extreme price movements. As a result, Bitcoin’s behavior increasingly resembles that of a structured financial asset rather than a purely speculative instrument.

From Inflation Fear to Deflation Anxiety

Beyond market mechanics, Pompliano highlights a shift in macroeconomic sentiment. He suggests that the recent decline is less about technical weakness and more about changing expectations. While Bitcoin’s rally toward $126,000 coincided with fears of inflation driven by tariffs and policy uncertainty under a Trump administration narrative, current market pricing reflects reduced inflation concerns and growing deflationary anxiety. As expectations of high inflation fade, demand for Bitcoin as an inflation hedge can temporarily weaken.

Hash Rate Declines and Gold’s Divergence

Addressing concerns around falling Bitcoin hash rate, Pompliano explains that recent declines are largely operational rather than structural. Major North American mining firms reportedly shut down machines during extreme cold weather, selling electricity back to the grid for economic efficiency. He argues this has no lasting negative impact on Bitcoin’s fundamentals.

Meanwhile, gold reaching new highs is attributed to central bank behavior. Pompliano notes that central banks are accumulating gold not as an inflation hedge, but as a way to distance themselves from fiat currencies. Bitcoin, still not recognized as a reserve asset by central banks, has yet to benefit from this trend.

Taken together, Pompliano’s analysis suggests that Bitcoin’s current drawdown may reflect a transition phase rather than the onset of a traditional bear market.

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The Debate Around a “Bear Market Rally”

Since November 21, Bitcoin has climbed by roughly 21%. While this recovery has been notable, it followed a sharp decline of approximately 19%, during which Bitcoin fell below its 365-day moving average. This long-term average is widely regarded as a key boundary separating bull and bear market conditions.

Once Bitcoin dropped below this level, the broader market structure shifted toward bearish territory. Although prices have since rebounded, Bitcoin has yet to decisively reclaim the 365-day moving average, which currently sits near the $101,000 level. This failure to regain the long-term trend line has raised questions about the sustainability of the move.

Historical patterns reinforce this caution. In 2022, Bitcoin experienced a similar setup: a strong rally after falling below the same long-term average, followed by renewed selling pressure once prices approached that level. The current market setup shows notable similarities, suggesting that the underlying bearish structure may still be intact.

Demand Signals Remain Fragile

On-chain demand indicators point to limited improvement rather than a broad-based recovery. In the United States, spot buying activity has shown occasional strength, as reflected by brief periods where local prices traded at a premium. However, these bursts of demand have been short-lived and have not translated into sustained accumulation.

Spot Bitcoin ETFs based in the U.S. also provide a mixed signal. While heavy net selling seen in November has slowed, inflows in early 2026 remain modest. Approximately 3,800 BTC has flowed into ETFs so far this year, a level well below what is typically observed during strong bull market recoveries.

Over the past 30 days, spot Bitcoin demand has contracted by roughly 67,000 BTC, remaining in negative territory since late November 2025. This ongoing contraction underscores the lack of broad participation behind the recent price increase.

Rising Exchange Inflows Raise Caution

Another notable development is the increase in Bitcoin transfers to exchanges. Average daily inflows have climbed to around 39,000 BTC, the highest level since late November. Historically, rising exchange inflows following relief rallies have often preceded renewed sell-side pressure.

Overall Market Assessment

Taken together, technical levels and on-chain metrics suggest that Bitcoin remains in a bear market environment. While the recent rally has been impressive, the absence of strong demand and the failure to reclaim key long-term levels indicate that this move may be a temporary reprieve rather than the start of a durable recovery.

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What Long-Term Indicators Are Signaling

Several composite indicators used to assess Bitcoin’s overall market health evaluate variables such as network usage, investor profitability, demand dynamics, and liquidity conditions. A notable portion of these indicators began to weaken in early November and have yet to show meaningful recovery. This persistence is often interpreted as a sign that downside pressure is becoming structural rather than temporary.

From a technical standpoint, one of the most widely followed confirmations of a bear market is Bitcoin’s move below its one-year moving average. This indicator reflects the average price over the past 12 months and is commonly used to identify long-term trends. When Bitcoin trades below this level for an extended period, it is frequently viewed as confirmation that bullish momentum has broken down.

Bitcoin’s 2025 Price Performance

Bitcoin entered 2025 trading near the $93,000 level and experienced a strong rally in the first part of the year. This advance culminated in a peak of $126,080 in October. However, prices failed to hold those levels, and Bitcoin ultimately declined to finish the year below where it began. This sequence — a sharp peak followed by sustained weakness — has reinforced concerns that the broader trend has shifted.

Potential Bear Market Bottom: $56,000–$60,000

Historical bear markets in crypto have often followed a similar pattern: after significant excess during bull phases, prices tend to retrace toward the realized price. This level represents the average cost basis of Bitcoin holders and has frequently acted as a long-term support zone during market downturns.

Based on prior cycles and current valuation metrics, a potential bottom in the range of $56,000 to $60,000 is considered plausible over the coming period. This would align with historical behavior observed during previous bear markets.

Why This Bear Market May Be Different

A decline to the $56,000 level would represent roughly a 55% drawdown from Bitcoin’s all-time high. While substantial, this would still be notably milder than the 70–80% declines seen in earlier cycles. Additionally, the absence of major systemic failures or high-profile collapses suggests a more orderly market environment.

Another key difference lies in market structure. Institutional participation, ETF-related demand, and a broader base of long-term investors have introduced more consistent buying behavior. Unlike previous bear markets, where demand largely vanished, current conditions suggest a more resilient and mature ecosystem. These structural changes may ultimately limit downside volatility and support long-term stability for Bitcoin.

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Market Analysis and Historical Parallels

Cowen evaluates Bitcoin’s decline through the lens of the four-year cycle theory and macroeconomic factors. Historically, Bitcoin tends to peak in the fourth quarter following halving events. Previous cycles in 2013, 2017, 2021, and the current 2025 cycle confirm this trend. However, Cowen highlights that this cycle is also influenced by macro conditions similar to 2019.

According to Cowen, the return-on-investment (ROI) curve from the bottom mirrors prior cycles. The 2016–2017 cycle lasted roughly 1,067 days, 2020–2021 about 1,059 days, and the current cycle around 1,062 days, showing Bitcoin’s cyclicality and historical price behavior remain relevant.

Critical Signal: 50-Week Moving Average

Cowen notes that Bitcoin’s inability to stay above its 50-week moving average (~$103,000) for several weeks would signal a key market pattern. Historically, similar behavior marked the 2021 peak.

Is Bitcoin Entering a Bear Market? CryptoQuant Insights

Retail Investor Apathy

Cowen highlights that the lack of an altcoin season underscores reduced retail participation. Social interest and investor behavior mirror the 2019 scenario, suggesting patience is crucial.

He also recalls that BTC peaked near the end of monetary tightening in 2019, followed by a weak period. Today, high interest rates continue to pressure risk assets, and even if rates start falling, Bitcoin may not experience an immediate rebound.

Long-Term Opportunities

By analyzing past cycles, Cowen points out that patient investors often profit in bear markets. For example, early investors in the 2017 and 2021 cycles gained significant long-term returns despite missing short-term peaks. Similarly, investors who remain patient toward 2026 may find opportunities in Bitcoin.

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Demand Waves And Market Movements

CryptoQuant analysts highlight three major demand waves in this cycle. The first wave followed the US Bitcoin ETF launch in January 2024, the second came after the 2024 US presidential election, and the third was driven by the Bitcoin Treasury Companies bubble. Analysts note:

“The Bitcoin demand boom is fading. This cycle ran on three major spot demand waves, and the latest one appears to be rolling over. Since early October, demand has been below trend, which can remain bearish for price.”

Institutional Demand Declines

Institutional investor interest is also contracting. In Q4 2025, Bitcoin ETFs saw holdings drop by approximately 24,000 BTC, sharply contrasting the strong accumulation in Q4 2024. Funding rates for perpetual futures have fallen to their lowest levels since December 2023, further reinforcing bearish signals.

Bitcoin’s price structure has broken below the 365-day moving average, a key dynamic support level. Analysts warn that this breach strengthens the likelihood of a bear market.

Potential Downside Levels

Analysts note that historically, Bitcoin bear market bottoms align with realized price levels. Current estimates place this level around $56,000. This implies a potential drawdown of about 55% from the recent all-time high, one of the smallest declines on record. Intermediate support is expected around $70,000. Analysts emphasize that these levels serve as guidance, and the market can always produce surprises.

Future Outlook And Market Sentiment

Some analysts remain optimistic for 2026, but overall market sentiment remains in “fear” territory. Falling interest rates, potential increases in demand, and risk asset catalysts may provide support. The Crypto Fear and Greed Index from CoinMarketCap shows investor sentiment firmly in the fear zone.

US monetary policy remains uncertain. CME Group’s FedWatch tool shows only 22.1% of investors expect the FOMC to cut rates in its January meeting. Political developments are also influential; US President Donald Trump reportedly pressured Fed Chair Jerome Powell to lower rates in 2025, and with Powell’s term ending in May 2026, potential replacements are expected to favor rate cuts.

Why It Matters?

Falling demand, institutional outflows, and broken technical support could shape Bitcoin’s trajectory in the coming months, directly influencing investor strategies and market risk appetite.

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This trend raises questions for investors about BTC expectations as the year-end approaches. November 2025 ranks among the weakest periods on record. Historical data suggests that a red November often leads to continued pressure in December, though the decline is usually milder.

Why BTC Price Disappointed Bulls

Bitcoin has fallen 36% from its all-time highs, shaking the confidence of bullish investors. Network economist Timothy Peterson noted on Twitter (X) that BTC’s second-half 2025 performance almost entirely mirrors 2022.

Commenting on November’s performance, Peterson wrote, “It feels bad because it is bad.” His words summarize why investors remain cautious amid short-term volatility.

Institutional Investors Return to Crypto

Meanwhile, rising risk appetite and institutional interest indicate potential year-end market recovery. According to Bloomberg and JPMorgan data, U.S. equity funds have received $900 billion in new capital since November 2024, with $450 billion added in the last five months alone.

By contrast, other asset classes have only seen $100 billion inflows. This demonstrates that equities have attracted more capital than all other asset classes combined.

Crypto ETFs Boost Investor Sentiment

Bitcoin and Ether ETFs indicate that the peak of institutional crypto sell-offs may be behind us. During Thanksgiving week, BTC ETFs recorded $220 million in inflows, while Ether ETFs added $312 million. These figures signal renewed investor interest in digital assets.

Experts suggest that BTC may not experience a true price rebound until Q1 2026. However, the growing appetite for risk assets and ETF inflows provide hope for a potential year-end “Santa rally.”

History Repeats, But Investors Should Be Prepared

As 2025 draws to a close, Bitcoin mirrors the previous bear market trend. Weak performance in November may extend into December, albeit with a lighter decline. Institutional capital and ETF inflows could provide positive momentum, making preparation for short-term volatility crucial for investors.

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Analysts Expect Deeper Declines Ahead

Chris Burniske, partner at Placeholder, emphasized that the selling phase is only beginning, noting that steep declines often mirror the pace of rapid upward moves. Similarly, Alliance DAO co-founder QwQiao suggested that prices may need to drop an additional 50% before a solid foundation can form in the market.

Institutional caution is amplifying market fragility. Major Bitcoin ETFs, such as IBIT, reportedly have a cost basis around $80,500, suggesting that significant outflows from funds could continue. Some experts caution that these levels may not yet represent the true bottom of the bear market, indicating further downside potential.

Institutional Withdrawals and Forced Selling Intensify

US-listed Bitcoin ETFs experienced a combined $903 million in outflows in a single day, marking the second-largest net redemption since their January 2024 debut. Open interest in perpetual futures has also declined by 35% from the October peak of $94 billion. Weak sentiment across the market is discouraging investors from buying the dip.

October 10 saw a massive liquidation wave that erased $19 billion in leveraged positions, removing roughly $1.5 trillion from the total crypto market capitalization. Ethereum also dropped below $2,700, with liquidations surpassing $1 billion across multiple timeframes, and a single-hour spike approaching $1 billion.

Market Structure Shows Cracks and Historical Patterns Resurface

Analysts point out that the market disruption in October is still evident, reflecting structural weaknesses. Observers note parallels to the cascading corporate failures from the TerraUSD collapse through the FTX collapse in 2022.

Benjamin Cowen, CEO of Into The Crypto, reminded investors that historically, Bitcoin tends to peak in Q4 of a post-halving year and reaches a bottom roughly one year later. He emphasized the importance of trading based on the market as it is, rather than on expectations.

Long-term models suggest that Bitcoin’s volatility is gradually narrowing, though its exact placement within projected ranges will depend on macroeconomic conditions and investor psychology. With no clear market floor in sight, the crypto sector faces sustained pressure as the bear market unfolds.

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Bitcoin Wipes Out 2025 Gains as Liquidations Surge

Bitcoin’s sharp pullback triggered more than $1.1 billion in liquidations across major exchanges, creating a chain reaction of forced selling. In addition to this widespread liquidation event, digital asset investment products experienced approximately $2 billion in outflows, adding further weight to the sell-side pressure. Therefore, questions came to mind whether the bear market has started.

This dramatic market move quickly became a focal point of a recent discussion hosted on the YouTube channel “The Wolf Of All Streets,” where macro strategists dissected the rapid volatility. Many analysts noted that the pattern of cascading liquidations and fear-driven selling resembles previous market collapses in crypto history.

McGlone Warns: A Modern “Black Monday” Cannot Be Ruled Out

Bloomberg Senior Commodity Strategist Mike McGlone issued a stark warning about the potential implications of the current decline. According to McGlone, the sell-off is not merely a short-term correction but could signal the early phase of a deeper downturn—possibly extending beyond crypto and impacting equities as well. He cautioned that the risk of a modern-day “Black Monday” scenario is increasingly worth considering.

Experts participating in the discussion highlighted several key drivers behind the negative market sentiment:

1. Weakening Capital Inflows: A decline in fresh capital entering the market has reduced Bitcoin’s ability to recover from sharp moves.
2. Mounting Macro Pressures: Global economic uncertainty, shifting central bank policies, and recession risks continue to weigh on risk assets.
3. Stress in Derivatives Markets: Panic in futures and options markets is spilling over into spot trading, amplifying volatility.
4. Insider Selling in Tech Stocks: Heavy insider selling among major technology firms is further eroding investor confidence.

Are We at the Beginning of a Bear Market?

McGlone argues that Bitcoin’s recent drop should not be interpreted as a temporary dip. Instead, he believes the market is entering a structurally bearish phase. Unless broader macroeconomic conditions improve, Bitcoin may continue leading the downside, potentially dragging the rest of the crypto market with it.

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Bitcoin and Long-Term Technical Levels

Bitcoin has dropped below its 365-day moving average (around $102,000), losing a key support level. This technical breakdown historically aligns with the onset of bear markets.

• Price action below the 365-day MA

• Risk signal compared to historical cycles

• Pressure on investor confidence

Additionally, BTC approaching the 6–12 month UTXO cost basis indicates mid-term market stress. This development calls for investors to watch closely for potential bear market risks or a bullish market rebound.

Market Sentiment and RSI Indicators

The Fear & Greed Index currently sits at 10, signaling extreme fear. Similar levels in the past preceded short-term bear trends or mid-cycle corrections.

RSI readings show most crypto assets in oversold territory. BTC and major altcoins have an average RSI of 43, reminiscent of mid-cycle corrections seen in May–July 2021 and August 2023.

On the other hand, some altcoins and short-term BTC movements hint at a possible bullish market recovery.

MACD and Market Momentum Analysis

The market-wide normalized MACD averages 0.02, reflecting weak bullish momentum. About 58% of assets still show positive momentum.

Bitcoin remains in negative MACD territory, while altcoins show a mixed picture. This indicates the market is still in a mid-cycle breakdown, with both bear and bull market possibilities present.

Critical Criteria for Bear and Bull Markets

Certain technical indicators are crucial to confirm a definitive bear or bull phase:

• BTC remaining below the 365-day MA for 4–6 weeks → Bear market confirmation

• Long-term holders selling over 1M BTC in 60 days → Bear pressure

• MACD flipping entirely negative or positive across the market → Bear or bull momentum

These conditions are not fully met yet, so the market remains in a high-risk transitional phase.

While the crypto market has not officially entered a bear market, it is experiencing mid-cycle stress. BTC and altcoins are under technical pressure, and investors should monitor both bear market pressures and potential bullish recoveries carefully.

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