Data Rings Alarm: Bitcoin Hits 2-Year Bearish Extreme — Historically Bullish?
Overview
Bitcoin has recently entered a phase that analysts are labeling the most bearish in the past two years, resulting in a significant decline in prices and impacting the broader cryptocurrency market. This downturn follows a notable drop from a previous peak, raising concerns among investors and market participants.
Recent Price Movements
According to data from CryptoQuant, Bitcoin’s price has decreased sharply, moving from a peak above $126,000 to approximately $83,790. This represents a decline of around 34%, which has effectively erased about $715 billion in market value. The rapid weakening of bullish conditions is underscored by a drop in CryptoQuant’s Bull Score Index, which fell to 20 out of 100, indicating weak spot buying, negative price momentum, and reduced stablecoin liquidity.
Additionally, Bitcoin has closed below its 365-day moving average, a long-term trendline that previously held during pullbacks in the current cycle that began in January 2023. This development has led CryptoQuant to classify the market as more bearish compared to earlier corrections.
Shift in Market Behavior
Trading desks and corporate treasuries have begun to alter their strategies in response to the changing market dynamics. Companies that previously supported Bitcoin’s price have experienced market value declines ranging from 70% to over 90%, limiting their capacity to issue shares and acquire more Bitcoin.
Michael Saylor’s strategy reportedly purchased 8,178 BTC recently, but has since slowed its acquisitions as its stock market capitalization approaches the value of its Bitcoin holdings. Furthermore, exchange-traded fund (ETF) flows have turned negative, with outflows nearing $3 billion this month. This trend may compel some institutions to liquidate spot holdings if they unwind spread trades.
Technical Indicators and Short-Term Outlook
On-chain indicators present a mixed picture for potential buyers. Glassnode has noted that the Mayer Multiple is nearing the lower end of its long-term range, which could signal a value-driven phase where buyers might re-enter the market. Although the Mayer Multiple indicates a slowdown in momentum, such compressions historically align with periods of consolidation and renewed demand.
Technical traders have observed oversold readings on both daily and weekly Relative Strength Index (RSI), suggesting a possible bounce. Some analysts anticipate a short-term recovery, with prices potentially testing levels above $100,000 if buying interest returns. However, the breach of the 365-day moving average complicates the outlook, with CryptoQuant indicating that resistance near $102,600 may be significant, while the support band between $90,000 and $92,000 will be closely monitored.
Market Shock and Macro Factors
Reports indicate that the recent sell-off was triggered on October 10 by a large leverage flush-out, causing many positions to close. This led to a reduction in liquidity from market makers and intensified selling pressure. Additionally, a software fault related to the Athena USDE stablecoin on Binance temporarily disrupted its peg, triggering automated liquidations across various platforms and exacerbating losses.
Macro concerns, including tightening liquidity and political uncertainty, have further pressured the market, prompting more traders to exit. Analysts have noted that past rallies in 2024 and 2025 were influenced by specific events, such as the U.S. presidential election and significant corporate treasury purchases of Bitcoin, but these catalysts appear to have played out, with any new triggers likely already priced in.
Impact on the crypto market
- Bitcoin has entered its most bearish phase in two years, leading to a sharp decline in prices and market value.
- The Bull Score Index has dropped significantly, indicating weak market conditions.
- Trading behaviors among corporate treasuries have shifted, impacting their ability to support Bitcoin prices.
- Negative ETF flows may force institutions to sell spot holdings, increasing market volatility.
- Technical indicators show mixed signals, with potential for short-term recovery but significant resistance levels.
- Macro factors and recent sell-offs have added to the challenges facing the cryptocurrency market.
Updated: 11/21/2025, 5:21:58 PM
