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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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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Macroeconomic Pressure and the Search for Store of Value

At the center of the bullish thesis lies macroeconomic stress. Rising government debt levels, persistent fiscal deficits, and long-term concerns around fiat currency debasement are reshaping investor behavior. In this environment, Bitcoin continues to be viewed not simply as a speculative asset, but as a hedge against systemic monetary risks.

The argument is straightforward: when confidence in traditional financial systems weakens, capital tends to seek assets with fixed supply and decentralized issuance. Bitcoin, as the largest and most established crypto asset, benefits directly from this shift. Importantly, these macroeconomic imbalances are not short-term phenomena. Structural debt issues and expansionary fiscal policies suggest that demand for alternative stores of value could remain elevated well into 2026.

Regulatory Clarity as a Catalyst for Growth

Beyond macro forces, regulation represents the second major pillar supporting a future bull market. While comprehensive US crypto legislation failed to materialize in 2025 due to political delays, momentum appears to be rebuilding. Lawmakers from both parties have shown renewed interest in establishing a clear federal framework for digital assets, with early 2026 emerging as a realistic timeline for progress.

Clearer rules could dramatically change the operating environment for the industry. Once the legal status of digital assets is firmly defined, token issuance may evolve into a mainstream financing mechanism. Startups, established crypto firms, and even large publicly traded companies could begin issuing tokens alongside traditional instruments such as equities and bonds, fundamentally expanding crypto’s role within capital markets.

Big Tech and Financial Institutions Enter the Picture

Another powerful adoption vector may come from major technology companies and financial institutions. Expectations are growing that a global Big Tech firm could integrate a crypto wallet directly into its ecosystem, potentially exposing billions of users to digital assets almost overnight.

At the same time, banks and fintech giants are increasingly exploring blockchain infrastructure. Many are expected to build private or permissioned networks that remain interoperable with public blockchains. Modular frameworks and scalable infrastructures are likely to play a central role in this hybrid model.

Looking Ahead to 2026 to Crypto

Taken together, macroeconomic stress, regulatory progress, and institutional adoption form a compelling narrative for crypto’s next growth phase. While market cycles remain unpredictable, these structural trends suggest that 2026 could mark a significant turning point for digital assets.

What Happened in Crypto Markets in the Last Year?

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Liveliness measures long-term onchain activity, similar to a moving average for coin movement. Technical analyst “TXMC” stated on Sunday, “Liveliness continues to rise this cycle even with lower prices, reflecting a strong demand floor for spot Bitcoin that isn’t yet visible in price action.”

What Liveliness Represents

According to TXMC, the metric works elegantly:

• Liveliness increases when coins are transacted and decreases when they are held.

• The metric scales according to coin age, making older coins’ movement more impactful.

• Historically, it rises during bull runs as capital flows into the market.

Analyst James Check noted that liveliness remained range-bound since the 2017 peak, but current cycles are breaking new highs. The reactivation of dormant coins shows an unprecedented rotation of capital this cycle. Check emphasized, “Unlike 2017, when transactions were hundreds or thousands of dollars, this cycle sees billions moving onchain.”

Bitcoin Price Trends and Consolidation

Over the last 24 hours, Bitcoin has seen limited movement. Prices briefly dipped below $89,000 on Sunday morning but recovered to around $89,500 at the time of writing. MN Fund founder Michaël van de Poppe commented, “Anything between $86,000 and $92,000 is largely noise. Significant moves will happen outside this range.”

He added, “If $92,000 is tested, we may break it, otherwise expect a test near the low $80,000s for a potential double-bottom pattern.” Analysts suggest the end of the year and early 2025 could see a strong rally.

Key Takeaways for Investors

• Liveliness continues to climb, reflecting ongoing investor demand

• Reactivation of old coins signals major capital rotation

• BTC price consolidating between $86,000–$92,000

• Long-term bull cycle may still be active

Rising liveliness indicates that despite short-term price fluctuations, Bitcoin’s bull market momentum remains intact. Onchain data and analyst insights suggest investors should monitor trends carefully while considering potential long-term opportunities.

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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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Bitcoin’s Technical Breakdown

According to Julio Moreno, Head of Research at CryptoQuant, Bitcoin dropped below its 365-day moving average at $101,564. Moreno stated on X, “This was the final confirmation of the 2022 bear market,” adding that prices need to rebound above this level quickly. Coinbase data showed BTC briefly hitting a low of $98,900 before slightly recovering to around $101,800.

The 365-day moving average tracks the average price of Bitcoin over the past year and serves as a key technical indicator. Market observers consider this metric critical for gauging investor sentiment. When BTC drops below this average, it is often seen as a strong bearish signal. Analyst Decode noted that Bitcoin also briefly fell below this level in April.

Correction or Bear Market?

Bitrue analyst Andri Fauzan Adziima commented that Tuesday’s drop technically indicates a bear market. BTC has fallen more than 20% from its all-time high of $126,000 reached in early October. However, Adziima emphasized that this is the fourth correction in the 2025 bull cycle—a routine market cleanup rather than the start of a long bearish period. Historical data shows that in bull markets, a 20% drop often leads to a 40% recovery within 60 days.

Tom Cohen, Head of Investment and Trading at Algoz Technology, added, “For Bitcoin to enter a true bear market, it would have had to breach the $100,000 level earlier.” Cohen also highlighted that macroeconomic developments, political moves by former President Trump, and the upcoming U.S. interest rate decision in December will heavily influence the market.

Bull Market Perspective

Although falling below the 365-day moving average caused short-term panic, experts view it as a normal correction within a bull cycle. Historical trends suggest that BTC can recover quickly from such dips. Market watchers note that if support holds, a strong year-end rally, commonly called a “Santa Claus rally,” is still possible.

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Google Searches Are Not Following the Bull

Crypto prediction platform Kalshi highlighted via X (formerly Twitter) that “buy Bitcoin” searches are significantly lower than during the 2017 and 2021 bull runs.

Google Trends data for October 2025 shows the US search interest at 11, far below the December 2017 peak of 100 and February 2021 high of 45.

“We are still in the early stages.” — The Kobeissi Letter

Google clarifies that Trends data is based on a sample and excludes low-volume queries. Therefore, it may not fully capture actual user interest, especially as search behaviors evolve.

Market Growth vs. Retail Silence

Financial analysis newsletter The Kobeissi Letter describes this as a “crypto paradox”:

“The crypto market surpassed $4 trillion, yet 75% of investors have not invested in crypto at all.”

Data from The Block and CryptoPotato shows that the market expansion is largely driven by institutional investment, ETFs, and stablecoin volumes, while retail search interest lags behind. Some analysts interpret this as an early-stage institutional bull market.

A user on X commented:

“Even if only 0.05% of ChatGPT’s 2.5 billion daily messages are crypto-related, that equals 1.25 million Bitcoin queries. Google may now underreport actual interest.”

Changing Behavior: From Search to Engagement

Experts note that crypto investors increasingly seek information directly on platforms, via:

• Exchange dashboards and analysis pages

• AI tools like ChatGPT

• Social media communities (Telegram, Discord, Reddit)

Thus, terms like “buy Bitcoin” may no longer reflect true investment interest. More relevant searches include “BTC staking,” “ETH ETF,” or “stablecoin yield.”

What This Paradox Suggests

Even as the crypto market tops $4 trillion, low search interest indicates a market driven more by institutional capital and algorithmic strategies than retail hype.
The key question remains:

“Could this quiet be the early stage of a new bull run?”

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Trump’s Plan Could Fuel Crypto

In an interview with One America News Network, Trump said that customs tariffs could generate over $1 trillion in annual revenue. The government will use part of this income to reduce federal debt, while the remainder will be distributed as a “dividend to the American people.” If this plan goes ahead, the increased income could drive U.S. citizens to invest in the altcoin market. Similar measures have previously triggered significant movements in the altcoin space, so investors are closely watching these historical patterns.

You May Be Interested In: Is Altcoin Season 2025 Dead or Just Delayed?

Altcoin Boom During the Pandemic

In 2020–2021, the government distributed stimulus checks, sparking a historic surge in the altcoin market. Bitcoin dominance fell from 73% to 39%, and many smaller tokens saw significant gains. Harvard Kennedy School researcher Marco Di Maggio noted that government payments encouraged investors to take on riskier assets.

However, experts say the scenario could be different this time. By 2025, the crypto market reached $4 trillion, and interest rates remain high. Wintermute strategist Jasper De Maere predicts the new altcoin season will be more selective, focusing on projects’ real utility rather than a broad public rally.

Trump’s “tariff dividend” plan could alter investor behavior. If it triggers a wave similar to the pandemic, investors might kick off a new bull season in the altcoin market.

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Every dog has its day — woof woof $ETH pic.twitter.com/C84UeX3YUF

— Peter Brandt (@PeterLBrandt) June 9, 2025

Symmetrical Triangle and Bull Flag Signals

The symmetrical triangle does not provide a clear directional bias. However, considering the 50% surge between May 8-13, this formation is turning into a bull flag. A bull flag predicts the continuation of an uptrend. Brandt’s chart emphasizes that Ethereum’s tightening price structure is ready to explode. 

Whales and Institutions’ Interest in ETH

Major institutions like BlackRock have started to recognize ETH’s potential. Whales are also turning to ETH amid recent market turbulence. Although Brandt was previously cautious about Ethereum, he now states that the long-term consolidation pattern could trigger a significant rally. In particular, his statement, “This consolidation pattern could support a moonshot,” is drawing investors’ attention. 

If Peter Brandt’s bull flag pattern materializes, a decisive daily candlestick close above the flag’s upper trendline will be required. This move would confirm a bullish breakout, with the target calculated by adding the length of the rally before the flag to the flag’s base. According to Peter Brandt’s hints, the theoretical Ethereum price target would be $3,611. 

On the other hand, on June 6, nine spot Ethereum ETFs saw a net inflow of 6,819 ETH ($17.3 million). BlackRock’s iShares ETF (IBIT) recorded the largest inflow with 6,356 ETH ($16.13 million), holding a total of 1,513,131 ETH ($4 billion). However, the Invesco Galaxy Ethereum ETF experienced an outflow of 543 ETH. Grayscale Ethereum Trust and Ethereum Mini Trust lost 78 ETH and 2 ETH, respectively. Other ETFs recorded zero inflows. 

What Does Technical Analysis Say?

Ethereum (ETH) appears poised to finally break out of the bearish FVG zone it has been stuck in for days. If the daily close occurs above this zone, a strong rally toward $3,000 could begin after a retest. Today’s close is critical in this regard! However, if the level is not broken, the price will remain trapped in this zone, and up-and-down fluctuations will continue. Sharp moves could be seen this week; it’s worth paying attention to the close and volume. 

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Significant Decline in Bitcoin Futures!

On-chain analytics platform CryptoQuant revealed in its March 17 “Quicktake” blog post that Bitcoin futures markets have undergone a significant deleveraging event. According to the report, aggregate open interest (OI) dropped by $10 billion between February 20 and March 4.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

Bitcoin (BTC) futures open interest had reached an all-time high of $33 billion on January 17, marking unprecedented levels of market leverage. However, following this peak, a sharp decline in risk appetite and the reduction of leveraged positions led to a significant drop in OI.

A Healthy Market Correction Process!

CryptoQuant analyst Darkfost described the decline as a “natural market reset.” According to the analyst, these types of liquidation periods are essential for maintaining the sustainability of an ongoing bullish trend.

Darkfost said, “Currently, Bitcoin futures open interest has decreased by 14% over a 90-day period. Historically, such deleveraging events have provided favorable opportunities in the short to medium term.”

Crypto Market Faces a ‘Demand Crisis’ Warning!

Another CryptoQuant analyst, Kriptolik, pointed out that derivative markets have become increasingly active since November 2024. However, the rise in stablecoin reserves on derivatives exchanges compared to spot markets indicates a lack of genuine demand in the spot market.

Kriptolik stated, “Despite the significant increase in total stablecoin supply since November 2024, the market and investors have not benefited substantially.” The analyst emphasized that the spot market is currently experiencing a “demand crisis.”

He added, “Until this distribution normalizes, avoiding high-leverage (high-risk) trades may be the most prudent approach.”

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