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Bitcoin’s recent decline below key technical levels has fueled an intense debate among market analysts, with opinions split on whether the asset has entered a full bear market or is simply experiencing a deep mid-cycle correction. The drop below the 365-day moving average and a collapse in market sentiment have raised concerns, even as whale accumulation and strong liquidity conditions offer a conflicting narrative.
Bitcoin has traded under its 365-day moving average at $102,000 since last week, a threshold that has historically marked major trend shifts. At the same time, the Fear & Greed Index plunged to 10—levels not seen since 2022—reflecting widespread investor anxiety. In just one month, over $700 billion has been wiped from the crypto market, underscoring the severity of the pullback.
Technical Breakdown Fuels Bear Market Concerns
Bitcoin’s second dip below the $100,000 mark within a week intensified fears of a deeper correction. Analysts often view the 365-day moving average as a long-term boundary between bullish and bearish market phases. Notably, similar breakdowns in 2018 and 2021 preceded extended bearish periods, making the latest move a worrying signal for traders.
On-chain metrics add to the caution. Bitcoin is now trading under the realized price for coins held between six and twelve months, currently around $94,600. This price represents the average cost basis for mid-term holders who typically buy during bullish phases. If Bitcoin remains below this level, many of these investors face losses, potentially increasing sell-side pressure across the market.
Meanwhile, Bitcoin perpetual futures have recorded a sharp jump in open interest—rising over $3.3 billion in a single week, the largest increase since April. A significant number of traders placed buy-the-dip orders near $98,000, expecting a quick rebound. Instead, continued downside movement activated these orders, adding leveraged exposure during a declining market and amplifying volatility.
Veteran trader Peter Brandt added to the cautious sentiment. He pointed to a sweeping reversal on November 11, followed by eight consecutive sessions of lower highs—an early sign of weakening momentum. Brandt also highlighted a broadening top formation, offering downside targets of $81,000 and $58,000 if selling pressure accelerates.
Still, not all analysts agree that the current phase qualifies as a bear market. Some call it a “mid-cycle breakdown,” a period of turbulence that occurs within broader bullish cycles. According to this view, more evidence is needed to confirm a bear market, including:
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Bitcoin remaining below the 365-day moving average for 4–6 weeks
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Long-term holders selling over 1 million BTC within 60 days
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A negative market-wide MACD indicator
Until these conditions are met, analysts argue that Bitcoin may still recover without entering a prolonged downturn.
Whale Accumulation Counters Bearish Sentiment
Despite rising fear among retail traders, on-chain data shows that Bitcoin whales are accumulating. Addresses holding at least 1,000 BTC have increased their positions during the decline, suggesting that large investors view current prices as an opportunity rather than a danger.
Historically, whale accumulation during periods of panic has often signaled confidence in long-term value. This buying activity stands in stark contrast to the behavior of smaller investors, many of whom have exited positions in recent weeks.
Global Liquidity Supports a Bullish Outlook
The strongest argument against a bear market comes from global macro conditions. Over 80% of central banks are easing monetary policy, pushing global liquidity to record highs. For risk assets like Bitcoin, abundant liquidity has historically provided strong upward support.
According to recent data, central banks are cutting rates and increasing liquidity injections across major economies. The Bank for International Settlements noted that US-dollar credit expanded by 6% and euro-denominated credit grew 13% year-over-year through Q2 2025. Rising credit availability tends to benefit speculative and growth-oriented markets, including digital assets.
Analysts also point out that past bull cycles often began during periods of expanding liquidity. Even short-term corrections occurred before broader rallies took hold. As long as liquidity continues rising—and central banks show no signs of tightening—Bitcoin’s structural outlook remains supported.
Economic Headwinds Create Uncertainty
However, not all macro data is optimistic. The IMF’s April 2025 Global Financial Stability Report warned of stretched valuations in technology sectors, while the OECD expects global GDP growth to slow from 3.3% in 2024 to 2.9% in 2025. These headwinds could limit the positive effects of liquidity on risk assets.
Conclusion
Bitcoin sits at a crossroads, with technical indicators pointing toward potential weakness while whale accumulation and global liquidity bolster the bullish case. With analysts divided, the coming weeks—especially Bitcoin’s ability to reclaim the 365-day moving average—will determine whether this downturn becomes a deeper market reversal or simply another mid-cycle shakeout.
