According to on-chain indicators reviewed by analysts at cryptocurrency exchange Bitfinex, Bitcoin ($BTC) It will still be some time before this bearish cycle bottoms out.
The latest Bitfinex Alpha report revealed that the leading digital asset could fall further into the $40,000 range by the end of this year as more investors exit the spot market.
Drawdown potential up to $40,000
In past market cycles, $BTC It always falls at least 70% from its all-time high (ATH) before bottoming out and recovering. In the bear market of 2022, $BTC It is down 78% from $69,000 and 86% below its cycle high near $20,000 in 2018.
Based on previous drawdown patterns and time horizon between top and bottom, $BTC The future decline is likely to expand to the $40,000 level. The asset is currently down 53.9% from that point. $ATH $126,000. A fall to the $40,000 level would result in a decline of at least 68%. Furthermore, analysts believe that: $BTC It was done If cycle estimates are taken into account, the bottom of the bear cycle will be reached in the fourth quarter of 2026. Prices move relative to the moving average.
the analyst says $BTCDespite the lower asset floor over the weekend, the structural level remains unchanged. At the time of writing, the coin is trading near $60,000, below the true market average of $77,000, a level that represents the average cost basis of active investors. This level also acts as the dividing line between bull and bear market regimes, so Bitcoin’s price action will continue to be defined by the structural bear market environment.
Spot demand remains weak
After falling below the $61,500 support level and falling to a bear cycle low of $58,136 last week, $53,400 is now a key support level to watch. The move towards $58,000 reflects weakening spot demand due to short-term holder selling, exchange-traded fund (ETF) outflows, collapse of the digital asset treasury channel, and negative gamma pressure.
Unlike previous declines, there were no large-scale liquidations or flushes of open interest. $BTC Last week it was below $60,000. This confirmed the fact that this decline was a structural outflow within the spot market. With the market’s main demand engine gone, Bitcoin prices remain depressed and are likely to continue their downward trend in the coming weeks.
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“However, we are waiting for spot demand to revive as the market may find a bottom and start moving higher,” the analyst explained.
