The crypto market is cold and harsh, but smart money has already begun to quietly position itself.
As a crypto researcher who has traversed multiple bull and bear markets, I must say that the current market conditions remind me of those tough times in 2018 and 2022. Bitcoin has retraced nearly 30% since reaching its historical high of $126,000 in October, and is currently struggling to find support around $85,000.
The market sentiment index shows that we are in the 'extreme fear' zone, which is often when I start to get excited.
1. Why is the market still weak? The truth is shocking
In the past month, the most striking phenomenon is that Bitcoin 'old holders' (OG holders) are selling at the fastest pace in five years. These early investors have very low holding costs, and even cashing out at current prices yields substantial profits.
At the same time, the demand forces that once absorbed these sell pressures, such as ETF capital inflows and institutional buyers, have begun to shrink. This supply-demand imbalance is the core reason for the continued decline in the market.
The abrupt change in tariff policy at the beginning of October triggered a $19 billion liquidation, setting a record for the largest single-day leveraged liquidation in cryptocurrency history, completely changing market sentiment. Traders have fled the derivatives market and have yet to return.
II. My exclusive viewpoint: This time it's really different
Contrary to popular belief, I believe this drop is not a structural collapse but rather a typical cyclical adjustment.
On-chain data tells me that the market's 'intrinsic health' is actually quite solid: the number of active addresses has not plummeted, mainstream ecosystem TVL is steadily growing, and net inflows of stablecoins remain positive. These signals indicate that on-chain is healthy, while prices are 'jittery'.
The real issue lies in the macro environment. Uncertainty in Federal Reserve policy, tensions in US-China trade relations, and year-end liquidity tightness have created a perfect storm. But these are all external factors, and there are no fatal problems with cryptocurrency itself.
III. Recovery timeline: My predictions differ from most people's.
Many analysts predict that the market will take longer to recover, but I believe that March 2026 will be a key turning point.
Why this time point?
First, the positive effects of the Federal Reserve ending quantitative tightening (QT) need time to permeate the market. Historical experience shows that risk assets typically see significant increases 6-12 months after the end of QT.
Secondly, seasonal factors are also important. The pressure from year-end institutional rebalancing and profit-taking by investors will significantly ease after the New Year.
Finally, options market data shows that a large number of institutions are buying call options expiring in March 2026, with strike prices between $130,000 and $180,000. This 'big money' is clearly positioning for market movements in the first half of next year.
IV. How to respond? My personal advice
In the current market environment, my strategy is 'gradual accumulation, focusing on mainstream'.
Bitcoin's dominance has risen above 58%, which is common during downturns as capital tends to concentrate in the most mature and liquid assets. For altcoins, I recommend being cautious until Bitcoin establishes a bottom and begins an upward trend.
Key support levels are in the range of $88,000 to $89,000; if effectively broken, it may test $85,000 or even lower. However, in my opinion, the probability of breaking below $75 is very small, and if it occurs, it will be a rare opportunity to buy at the bottom.
V. Long-term outlook: Why I am still confident
Despite facing short-term challenges, Bitcoin's long-term narrative remains intact.
Institutional adoption is still ongoing, sovereign interest is slowly accumulating, and Bitcoin's role as a neutral, programmable monetary asset continues to play a role. Once the macro environment improves, these factors will drive prices to new highs.
Institutions like Standard Chartered still predict that Bitcoin could reach $200,000 by the end of 2025, based on ETF capital inflows, improved regulatory environments, and continued institutionalization.
Conclusion: Sow in winter, reap in spring
The market always cycles back and forth; every deep drop is building momentum for the next rise. The current market structure reminds me of the pattern before March 2020, which was the 'stabilization period before the main upward trend'.
As an experienced market participant, my advice is: stay calm, stick to dollar-cost averaging, and keep cash on hand for better opportunities. The emotional pendulum of the market always swings from extreme fear to extreme greed, and smart investors know how to take advantage of this swing.
When do you think the market will recover? Feel free to share your views in the comments!
(The views in this article are for reference only and do not constitute investment advice. The market carries risks, and investments should be made cautiously.)
This article is written by a cryptocurrency researcher who has experienced three bull markets and wants to gain more exclusive insights.
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