Is Bitcoin Entering a Bear Market?

The recent decline of Bitcoin into the mid-$90,000 range has sparked debates among investors and analysts. Is this a genuine bear market onset, or simply a correction within a larger upward trend? While analysts agree that key levels are crucial, their interpretations of these levels differ.

Insights from “The Great Mattsby”

Prominent macro swing-trader “The Great Mattsby” believes Bitcoin is following a well-known pattern. He recalls the 2024 scenario when Bitcoin consolidated between $70,000 and $50,000 for seven months before achieving a breakout. This historical context is crucial for understanding current market dynamics.

Utilizing monthly Fibonacci retracements, Mattsby notes that Bitcoin previously reached the 0.618 level at $51,518, briefly dipping below before rebounding. He applies this analysis to the latest Fibonacci setup, identifying $96,975 as a significant level. Currently, Bitcoin trades just below this threshold, echoing past movements.

With November nearing its end, Mattsby emphasizes the importance of Bitcoin maintaining the $96,000-$97,000 range for a monthly close. Such a pattern could mirror last year’s setup, potentially leading to new all-time highs after some months of retesting.

Rekt Capital’s Perspective

Market analyst Rekt Capital expresses caution regarding the recent breakdown. He highlights the 50-week exponential moving average (EMA) as a pivotal “bullish structure” for this cycle. His analysis shows the current weekly candle decisively falling below the 50-week EMA, which historically served as support.

Rekt Capital predicts a high probability of the weekly candle closing beneath this crucial EMA. He underscores the importance of the coming weeks in defining the macro trend: “Can Bitcoin generate enough upward momentum to reclaim the 50 EMA as support?”

On-Chain Data and Market Sentiment

Frank’s On-Chain Analysis

On-chain data provides an alternative perspective. Analyst Frank uses Checkonchain’s Short-Term Holder MVRV chart, highlighting recent buyer profitability relative to cost basis. The latest market downturn has pushed this metric into a negative zone, historically preceding significant bounces.

Frank’s strategy is clear: “I invest in standard deviation moves to the downside; they are rare but often present excellent opportunities.”

Insights from CryptoQuant’s CEO

Ki Young Ju, the founder of CryptoQuant, analyzes the current sellers. He views this dip as an internal rotation among long-term holders rather than widespread distribution. He notes that traditional finance players are acquiring Bitcoin from long-time holders, maintaining a long-term perspective.

Ju emphasizes the role of new liquidity channels, including ETFs and corporate treasuries, in sustaining market dynamics. He contends that the cycle theory is outdated as long as these channels remain active. Notably, Ju forecasted a potential 6-12 months of bearish or sideways market action earlier this year.

Technical Analysis and Future Outlook

The technical outlook for Bitcoin presents challenges, with critical levels such as the 50-week EMA and the $96,000-$97,000 Fibonacci zone under scrutiny. Reclaiming these levels could indicate a deep yet standard consolidation phase, while failure to do so might lend weight to bear market concerns.

As of now, the market’s future direction hinges on the closing of upcoming weekly and monthly candles, rather than daily fluctuations. At the time of writing, Bitcoin is priced at $93,938.