Analyzing Bitcoin’s Bearish Turn in Early 2025
As the first quarter of 2025 unfolds and Donald Trump begins his second presidential term, the financial landscape has not met the optimistic expectations of many. This is particularly evident in the cryptocurrency market, where initial forecasts of Bitcoin (BTC) reaching $800,000 have dramatically shifted to concerns over a potential bear market.
Signs of a Potential Bitcoin Bear Market
Renowned on-chain analyst Ali Martinez has highlighted several indicators suggesting that Bitcoin might be entering a new ‘crypto winter.’ Data from recent trading sessions points to a bearish momentum building up for the leading cryptocurrency.
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Indicators of a Macro Trend Shift
Martinez has identified key metrics, including the Inter-Exchange Flow Pulse, the Market Cap to Realized Cap (MVRV) Ratio, and the Market Cycle indicator, which collectively suggest a significant macro trend shift for Bitcoin. These indicators have been thoroughly discussed in a detailed analysis shared on March 18.
Supporting this outlook, Martinez presented compelling data showing a sharp decline in capital inflows from approximately $135 billion in December to just $4 billion by mid-March. This trend is further exacerbated by large investors offloading their holdings, with whales taking substantial profits.
Bitcoin’s Potential Support Levels
Despite the bearish signals, there is speculation that Bitcoin’s decline might find a temporary halt near the $69,000 mark. Martinez noted that around 750,000 traders purchased approximately 313,000 BTC near this price point, suggesting a strong support zone between $67,000 and $69,000.
However, historical patterns indicate that Bitcoin could drop below this support level, potentially hitting the 200-day simple moving average (SMA) near $46,000 if it falls beneath the 50-day SMA, which is currently just above $76,000.
Prospects for a Bitcoin Bull Run in 2025
Despite the prevailing bearish sentiment, Martinez remains cautiously optimistic about a potential continuation of the bull cycle. If Bitcoin can regain a value of $93,700, it could pave the way for a surge toward $111,000, fueled by a notable increase in global liquidity despite other bearish factors.
Current Market Sentiment
As of March 20, Bitcoin is testing the potential for a sustained rally. After a period of trading below $85,000, the cryptocurrency experienced a sudden spike to $87,000, although the market’s future direction remains uncertain. With Bitcoin still trading 12.66% lower over the past month and having retraced from recent highs, some analysts speculate that the recent rally might be a short-lived reaction to the SEC’s decision to drop its lawsuit against Ripple Labs.
The historical performance of Bitcoin offers a glimmer of hope, suggesting that the cryptocurrency tends to reach its cycle high 12-18 months post-halving. With the April 2024 halving in mind, Bitcoin might still achieve a new high later this year, given that it hasn’t fully retraced and is currently valued at $84,935.
