Recently, Bitcoin flashed a signal that analysts often consider the starting point for a prolonged downtrend: a monthly close below the 12-month moving average. This means the price closed below a key average price level, a move that has historically marked a shift towards a bear market.
For those familiar with crypto history, this is a critical moment. Let’s look at some charts that show why the current conditions are concerning. What is really happening behind the scenes of the crypto market?
Adoption Grows, Even in a Bear Market #
Despite the negative outlook, crypto adoption continues to grow. For instance, it was revealed that the Swiss National Bank holds over 750,000 shares of MicroStrategy. This shows that institutions are gaining exposure to Bitcoin through alternative avenues, even if direct reserves might not be desired.
Furthermore, the convenience store chain Sheets announced that customers paying with BTC receive a 50 percent discount. This is a strong signal that the cryptocurrency is increasingly being used as peer-to-peer cash in daily life.
These developments prove that crypto adoption marches on, even when the price is technically under pressure.
Technical Analysis: The Alarm Bells Are Ringing #
On the charts, I see a short-term pullback. On the 4-hour chart, the resistance around $91,000 was not broken, after which the price fell back to around $86,000. If this support fails, the next possible stop is $81,000. According to the indicators, a clear sell signal has been given.
On the 5-day chart, Bitcoin has also dropped below the so-called ‘Gusion Channel’. This is a tool in charts that shows whether Bitcoin is in an uptrend or a downtrend. In previous cycles, you consistently saw this signal just before a longer bear market. For me, this is reason to currently assess the market as at least 70 percent bearish.
The weekly chart shows that Bitcoin recently fluctuated around the previous all-time high. Initially good news, but the price then pulled back. Important support levels are now at $84,115, $82,000, and eventually $71,000.
If BTC closes below the previous weekly low, around $78,000, the trend could turn definitively. Historically, Fibonacci retracement zones point to a possible bottom between $40,000 and $60,000. This means that if Bitcoin falls below that point, it usually continues to drop to deeper price areas that often lie between $40,000 and $60,000.
The most troubling sign: Bitcoin closed a month below the 12-month moving average. In 2013, 2017, and 2021, this was consistently the beginning of a bear market of twelve months or longer.
This was accompanied by a bearish MACD crossover on the monthly chart. This means that two important lines cross in a way that usually indicates that the downtrend is strengthening. And this is exactly what happened before previous major crashes.
This phase is extremely important: the trend is structurally downward, unless there is a quick and strong reversal.
Additional Market Models Confirm This Potential Bottom #
It’s not just the well-known technical indicators that are sounding the alarm; other calculation models also predict that Bitcoin could go lower. The CVDD model, for example, which has been remarkably accurate in the past, indicates a possible bottom around $45,000. This model looks at how long bitcoins are held and how much value is moved in the process.
The risk indicator and similar valuation models also show that a bottom between $55,000 and slightly below is likely. These tools measure whether the market is ’expensive’ or ‘cheap’ compared to historical averages.
According to the ’true market mean’, Bitcoin is now in the same zone as just before previous short recovery rallies. This method calculates a kind of ’true average price’ to see where the market normally returns to. This could therefore provide a small rally first, but ultimately, these models together point to a real bottom between $40,000 and $50,000.
What Should You Do with Your Position? #
Keep all the above signals in mind. Next, it’s important to distinguish between trading and HODLing. For traders: now is the time to move with the trend. The market is bearish, and trading without discipline is risky. For long-term investors, I have a clear message: there is no need to panic.
Anyone who believes in the fundamentals of Bitcoin can see dips as buying moments. The strategy remains: a HODL stack (for retirement / long term) and a trading stack (to play the cycles). Perfect timing is impossible, but consistent investing and taking profits pays off in the long run.
For those who act strategically now, or keep track, there are opportunities.
Crypto Market Crashes: What Now? #
Although the signals are firmly bearish, I do not rule out the possibility of a short return to the $90,000-$100,000 range first. We call this a ‘relief bounce’. After that, however, the price could fall further to a bottom between $40,000 and $60,000. This is not the end, however, but part of Bitcoin’s cyclical nature.
Ultimately, it comes down to belief in the long term. Even when the market is under heavy pressure: zoom out, maintain perspective, and use this phase to strengthen your position for the future. No panic, but calm, strategy, and patience.