Bitcoin Has Entered A Bear Market, And This Data Backs It Up

Overview

Bitcoin is currently facing significant challenges, with the price trading between $87,700 and $88,000, indicating a notable decline from its previous all-time high. Recent analyses suggest that the internal market dynamics of Bitcoin are shifting, potentially signaling the onset of a bear market as on-chain data provides clearer insights into current conditions.

Current Price Dynamics

The ongoing price fluctuations of Bitcoin have raised concerns within the crypto industry about the possibility of entering a bear market. The current trading range of Bitcoin reflects a substantial drop of 30% from its all-time high reached in October 2025. While price movements typically allow for various interpretations, on-chain data is beginning to lend more clarity to the situation.

Shift in Market Structure

A key indicator to consider is Bitcoin’s Combined Market Index (BCMI), a composite measure that integrates both price behavior and on-chain momentum. Recent analysis from CryptoQuant indicates that Bitcoin’s BCMI has returned to the 0.5 level as of October. Initially, this was seen as a cooling phase rather than a definitive market peak, with expectations that Bitcoin was consolidating following a prolonged rally.

However, as market conditions have worsened, this perspective has shifted. Bitcoin’s price has experienced a significant decline since late October, coinciding with a decrease in the BCMI. This simultaneous drop suggests that the market is undergoing a reset in terms of time, valuation, and participation. The BCMI has now dipped below its equilibrium zone, a development typically associated with the transition into bearish market phases. During these periods, price rallies are often limited, and the risk of downside movements increases.

Historical Context

An examination of previous Bitcoin cycles provides further context to the current situation. In both 2019 and 2023, significant market bottoms were established only after the BCMI fell to the 0.25 to 0.35 range. These levels were indicative of deep sentiment compression and a structural market reset. Currently, Bitcoin’s BCMI is below 0.4, suggesting it is below equilibrium but still above a potential bottom zone. This indicates that the market may be shifting towards a bear market rather than merely experiencing a temporary pullback.

Weak Market Sentiment

Market sentiment further reinforces the notion that Bitcoin is entering a deeper bearish phase. Optimism among traders has been notably low, with many expressing doubts about the sustainability of the current price levels. The Crypto Fear and Greed Index is currently reading 28, placing market sentiment firmly within the Fear zone. This prevailing atmosphere of fear, uncertainty, and doubt is echoed in industry commentary, which highlights that many investors regret not purchasing Bitcoin at earlier, lower prices.

From author

The current market dynamics for Bitcoin are indicative of a potential transition into a bear market, as evidenced by the significant drop in price and the corresponding decline in the BCMI. The historical context surrounding previous market cycles adds weight to the current analysis, suggesting that traders should remain cautious as sentiment remains weak.

Impact on the crypto market

• Bitcoin’s price decline signals a potential shift into a bear market phase.
• The BCMI falling below equilibrium indicates increased downside risk for Bitcoin.
• Historical patterns suggest that further declines may be necessary to establish a durable market bottom.
• Weak market sentiment and a Fear reading on the Crypto Fear and Greed Index suggest a lack of confidence among traders.
• Industry commentary highlights the psychological impact of current market conditions on investor behavior.