Bitcoin hovers around the $65,000 level as persistent selling pressure continues to weigh on market sentiment. The recent decline has intensified uncertainty among investors, with volatility increasing while liquidity conditions remain fragile. After a strong rally early in the cycle, the price action now reflects a more defensive phase, with traders increasingly focused on downside risk rather than bullish momentum.
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A recent report from CryptoQuant frames the central question facing the cryptocurrency market: how far this bearish phase could extend before a lasting bottom forms. Bitcoin has fallen approximately 17% this year, a move attributed to several converging factors. These include approximately $12 billion in institutional ETF outflows over the past three months, broader global risk aversion tied to macroeconomic conditions, and ongoing regulatory ambiguity that continues to limit large-scale capital commitment.
Despite the negative context, analysts point out that intense institutional selling does not necessarily exclude a reversal. Historically, periods of strong distribution usually precede phases of accumulation. Therefore, the analytical focus is shifting towards identifying a potential accumulation zone: a price range where selling pressure exhausts and the largest market participants begin to rebuild their exposure. That transition, if confirmed, would likely mark the early stages of trend stabilization rather than an immediate recovery.
Market Cycle Signs: Capitulation Phase or Early Accumulation?
According to the report, understanding Bitcoin’s current environment requires focusing on market structure rather than short-term price forecasts. One framework that is gaining attention is the BTC Market Cycle Signals indicator, an on-chain analytical tool that interprets the Bitcoin cycle through three distinct phases using monthly Bollinger Band positioning. This approach aims to contextualize volatility rather than simply react to it.
The first phase, Distribution, typically occurs when price reaches or exceeds the upper Bollinger Band, often reflecting a feeling of euphoria and profit-taking behavior. This stage historically aligns with the peaks of bicycles. The second phase, Capitulation, arises when the price falls below the 20-month moving average and gravitates towards the lower band, indicating panic, forced selling and deteriorating sentiment. Finally, the Accumulation phase represents conditions in which long-term positioning becomes favorable, although this zone does not always coincide with the exact bottom of the market.
The current price action appears to be converging towards the level associated with early accumulation, estimated at around $54,600. Historically, this range has acted as a transition zone between capitulation and renewed accumulation activity.
However, this should be interpreted with caution. Although these indicators help clarify the positioning of the cycle, they do not eliminate uncertainty. Market reversals typically require confirmation through liquidity inflows, improving sentiment and sustained structural demand, rather than technical positioning alone.
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Bitcoin Breaks Key Support as Bearish Momentum Intensifies
Bitcoin continues to trade under heavy pressure, with the weekly chart showing a decisive break below the $70,000 level after several weeks of weakening the structure. The price recently closed near $67,200 following a strong rejection from the mid-$90,000 region, confirming a clear formation of lower highs and reinforcing the continuation of the downtrend. The move also represents a loss of momentum after the failed recovery attempt above the 50-week moving average, which had previously acted as dynamic support during the uptrend.
Technically, Bitcoin is now trading below the 50-week and 100-week moving averages. While the 200-week average remains significantly lower near the mid-$50,000 area. Historically, this zone has acted as an important long-term support. Which suggests that a further decline in that region cannot be ruled out if selling pressure persists. The volume expansion during the recent decline indicates distribution rather than simple low liquidity volatility.
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The market appears to be moving from a late bull cycle correction to a possible bear market consolidation phase. Unless Bitcoin quickly reclaims the $70,000 to $75,000 range and stabilizes above it, the probability of a continued decline or prolonged sideways accumulation will remain high in the near term.
Featured image from ChatGPT, chart from TradingView.com