Bitcoin is hovering around the $65,000 level as continued selling pressure continues to weigh on market sentiment. The recent decline has increased uncertainty among investors as volatility increases and liquidity conditions remain volatile. After a mighty rally earlier in the cycle, price action now reflects a more defensive phase with investors increasingly focusing on downside risk rather than upside momentum.
A recent report by CryptoQuant formulates the main question facing the cryptocurrency market: how far can a bear phase go before a constant bottom forms. Bitcoin is down approximately 17% this year, which is attributed to several converging factors. These include approximately $12 billion of institutional ETF outflows over the past three months, broader global risk aversion related to macroeconomic conditions, and continued regulatory uncertainty that continues to limit large-scale capital commitments.
Despite the negative context, analysts note that intense institutional selling does not necessarily rule out a turnaround. Historically, periods of intense distribution often preceded phases of accumulation. Analytical attention therefore shifts towards identifying a potential accumulation zone – a price range where selling pressure is exhausted and larger market participants begin to rebuild their exposure. This transition, if confirmed, will likely represent the early stages of trend stabilization rather than an immediate recovery.
Market cycle signals: capitulation phase or early accumulation?
According to reportUnderstanding the current Bitcoin environment requires focusing on market structure rather than short-term price predictions. One platform gaining attention is the BTC Market Cycle Signals indicator, an on-chain analytical tool that interprets the Bitcoin cycle in three distinct phases using monthly Bollinger Band positioning. This approach aims to contextualize variability rather than simply react to it.
The first phase, Distribution, typically occurs when price reaches or breaks above the upper Bollinger Bands, often reflecting euphoric sentiment and profit-seeking behavior. This stage historically coincides with cycling peaks. The second phase, Capitulation, occurs when the price falls below the 20-month moving average and heads towards the lower band, signaling panic, forced selling and deteriorating sentiment. Finally, the accumulation phase represents conditions where long-term positioning becomes favorable, although this zone does not always coincide with the exact market bottom.
Current price action appears to be approaching early accumulation levels estimated at approximately $54,600. Historically, this range served as a transition zone between capitulation and resumed accumulation activity.
However, this should be interpreted with caution. While such indicators support clarify the position of the cycle, they do not eliminate uncertainty. Market reversals typically require confirmation through liquidity inflows, improved sentiment and sustained structural demand, rather than technical positioning alone.
Bitcoin breaks key support as bearish momentum intensifies
Bitcoin continues to trade under bulky pressure, with the weekly chart showing a decisive break below the $70,000 level after several weeks of structural weakness. The price recently ended near $67,200 after a keen rejection from the mid-90k area. dollars, confirming a clear formation from lower to high and strengthening the continuation of the bearish trend. The move also represents a loss of momentum after failing to break above the 50-week moving average, which previously acted as energetic support during the uptrend.
Technically, Bitcoin is currently trading below its 50-week and 100-week moving averages. While the 200-week average remains significantly lower near the mid-50k area. dollars. Historically, this zone has served as the main long-term support. This suggests that further declines in this region cannot be ruled out if selling pressure continues. The boost in volume during the recent decline indicates distribution rather than the elementary volatility associated with low liquidity.
The market appears to be moving from a tardy bull market correction to a potential bear market consolidation phase. Unless Bitcoin regains the 70-75k range soon. dollars and does not stabilize above it, the probability of continued declines or long-term sideways accumulation will remain elevated in the near term.
Featured image from ChatGPT, chart from TradingView.com
