Market analysis
I. Core basis for confirming the bear market
1. Price trends and technical indicators
• Drop target: Bitcoin has fallen from the historical high of $126,251 on October 6 to about $93,000 currently, a drop of 26%, officially entering the technical bear market zone (usually defined as a drop of more than 20% from the high).
• Key support breakdown: Continuous breaches of key psychological levels such as $100,000 and $95,000 have occurred, with $93,000 now becoming the next key support level. If it fails to hold, it could accelerate the drop to the $90,000 or even $86,000-$91,000 region.
• Technical indicators deteriorating: MACD shows strong divergence, RSI has dropped to 32 indicating intensified selling momentum, and 58% of market assets are showing negative growth.
2. Capital flow and market sentiment
• ETF fund reversal: The U.S. spot Bitcoin ETF saw a massive net outflow of $870 million in a single day, marking the fifth consecutive week of outflows, the longest streak since March 14.
• Long-term holders selling: In the past 30 days, long-term Bitcoin holders have sold about 815,000 bitcoins, setting a record high since early 2024, indicating that core support is collapsing.
• Market sentiment is extremely fearful: The cryptocurrency fear and greed index has plummeted to 10-15, creating a seven-month low, in the "extreme fear" zone.
3. On-chain data and derivatives market
• Leverage liquidations intensify: Over 220,000 people were liquidated across the network within 24 hours, with a total liquidation amount of $1.077 billion, indicating a deep deterioration in the market.
• Liquidity shrinks: Over the past 12 months, the market capitalization of cryptocurrencies has risen from $2.4 trillion to $3.7 trillion, while the average daily trading volume has shrunk from $352 billion to $178 billion (a decrease of 50%).
• Derivatives hedging demand: There is a noticeable increase in demand for put options with execution prices below $100,000, particularly active trading of protective contracts around $90,000 and $95,000.
II. Comparative analysis with historical bear markets
Indicators 2018 bear market 2022 bear market 2025 current bear market
Trigger events: Regulatory tightening, ICO bubble burst, LUNA crash, Federal Reserve interest rate hikes, Trump tariff policy, government shutdown.
Maximum drop 84% 66% 26% (currently)
Lowest price $3,122 $16,300 approximately $93,000 (currently)
Recovery time 2 years (2020) 1 year (2023) To be observed
Market structure Early market, poor liquidity Has ETFs but limited institutional participation High institutional ratio, mature ETFs
It is worth noting that this bear market is fundamentally different from previous ones:
• Higher institutional participation: The Bitcoin ETF management scale has reached $169 billion, with a significant increase in institutional funding share.
• Volatility relatively reduced: Due to the entry of ETFs and institutional investors, market volatility has decreased compared to historical bear markets.
• "Easy bear market" characteristics: Dragonfly Capital managing partner Haseeb Keram stated: "Compared to the catastrophic collapse of 2022, today's pullback is minimal, and the fundamentals remain strong," calling it "the easiest bear market ever."
III. Future trend outlook
1. Short-term trend forecast
• Key support: $93,000 is the current key support level. If it can hold, it may form a short-term bottom; if it breaks, it may test the $90,000-$86,000 region.
• Rebound resistance: The $96,000-$97,000 area will become an important resistance level for a short-term rebound. If it can break through, it may test the $100,000 mark.
• Time cycle: Historical data shows that Bitcoin experiences multiple pullbacks of over 20% in each bull market, but ultimately sets new highs.
2. Institutional viewpoints divergence
• Bearish view: 10X Research believes the market has entered a "confirmed bear market stage" and points out that "it is not just pervaded by a bear market smell, but we are already in a bear market."
• Neutral view: Bitwise CEO Hunter Horsley stated that the traditional "crypto four-year cycle" model is no longer applicable, believing that "the crypto market has likely been in a bear market for the past six months, but is now close to emerging from the slump."
• Bullish view: Tom Lee stated that Ethereum will open a super cycle similar to Bitcoin, saying, "The path to higher is not linear, and it is recommended to hold."
IV. Investor response strategies
1. Risk management
• Strict stop-loss: In the current high-volatility environment, it is recommended to set a stop-loss range of 5-10% to avoid significant losses due to sharp market fluctuations.
• Position control: It is recommended to control the position of a single trade within 5-10% of total funds to avoid excessive leverage.
• Diversified investment: Avoid concentrating all funds in a single cryptocurrency asset and consider diversifying into mainstream coins like BTC and ETH.
2. Trading strategies
• Shorting on rallies: In the $96,000-$97,000 region, consider light shorting with a target below $93,000 and a stop-loss at $98,000.
• Buying on dips: If the price touches below $90,000, consider gradually building positions, targeting above $120,000.
• Focus on on-chain data: Closely monitor the behavior of long-term holders and the flow of institutional funds, as these are often leading indicators of market turning points.
3. Long-term perspective
• Cyclical thinking: The cryptocurrency market has obvious cyclical characteristics, and historical data shows that every bear market is followed by a stronger bull market.
• Value investing: Focus on project fundamentals and long-term value rather than short-term price fluctuations, as Bitcoin's scarcity (total supply of 21 million) and financial attributes enhance.
• Patience is key: The bear market is a process of market clearing and a phase to build strength for the next bull market. Maintaining patience is especially important.
V. Risk warnings
• Macroeconomic uncertainty: Factors such as the cooling of expectations for Federal Reserve rate cuts and the economic data absence due to the U.S. government shutdown are still fermenting.
• Liquidity risk: RRP (reverse repurchase agreements) have been completely exhausted, bank reserves have decreased, and the market funding situation is tightening overall.
• Regulatory risks: Global regulatory policies are tightening, and investor anxiety is rising.
Summary: The crypto market has confirmed entry into a technical bear market, but compared to historical bear markets, this adjustment is relatively mild, and the market structure is more mature. We should remain rational, avoid panic selling, and strictly control risks. Historical experience shows that bear markets are a necessary stage for the market to mature and a key period to build strength for the next bull market.