Crypto: Bitcoin Bear Market Declared
The start of 2025, specifically the first quarter (Q1) which also marks the initial months of Donald Trump’s second term as president, hasn’t quite unfolded as optimistically as many in the crypto world had hoped. A stark example of this shift in sentiment is how quickly analysts have moved from sky-high Bitcoin (BTC) price predictions—once aiming for $800,000—to now questioning if we’re actually entering another cryptocurrency bear market.
Adding to the worries for Bitcoin bulls, a growing number of indicators and signals have emerged recently, suggesting that BTC might indeed be headed for a new ‘crypto winter.’ This concerning trend is highlighted by data compiled by Ali Martinez, a well-known and respected on-chain analyst.
Why Bitcoin may be entering a new bear market
Martinez explained his reasoning, suggesting that a significant shift in the overall macro trend for Bitcoin is becoming increasingly likely. He pointed to several key indicators: the Inter-Exchange Flow Pulse, the Market Cap to Realized Cap (MVRV) Ratio, and the Market Cycle indicator. He detailed his analysis in a comprehensive thread on X, published on March 18.
Taken together, these elements paint a picture where the momentum for Bitcoin, the leading cryptocurrency, appears to be turning bearish, signaling potential downward pressure.
To support his bearish outlook, Ali Martinez presented data showing a sharp decline in capital flowing into Bitcoin. Inflows plummeted from roughly $135 billion in December to just $4 billion by March 18. This drop coincides with evidence of large investors selling off their holdings and significant profit-taking activity among whales, further fueling concerns.
Why Bitcoin’s fall may stop near $69,000
However, it’s not all doom and gloom. The analyst also shared a potential silver lining, suggesting that Bitcoin’s decline might find a floor around the $69,000 level. This is because a substantial number of positions were opened near this price point – approximately 750,000 traders bought 313,000 BTC. This concentration of buyers could create a strong support zone between $67,000 and $69,000.
Yet, history tells us that Bitcoin can be unpredictable. Despite this potential support, the cryptocurrency has often shown a tendency to drop quickly towards its 200-day simple moving average (SMA), currently around $46,000, after falling below the 50-day SMA, which is near $76,000—already beyond the immediate major support level.
Interestingly, Martinez’s analysis isn’t entirely negative. He also pointed out that there’s still a chance for the bull cycle to continue. According to his analysis, if BTC can climb back above $93,700, it would be well-positioned for another surge towards a new high, potentially reaching $111,000. This bullish scenario is supported by a noticeable increase in global liquidity, which remains evident despite the other bearish signals.
Is there a Bitcoin bull case for 2025?
As of March 20th, Bitcoin seems to be testing the waters for a possible rebound. After spending about 10 days trading below $85,000, it suddenly jumped up towards $87,000, hinting at renewed buying interest.
Nevertheless, the overall picture remains uncertain. Considering that BTC is still down by 12.66% over the past 30 days and has pulled back from its recent peak, it’s quite possible that this recent rally is just a temporary blip. It could even be a short-lived reaction to the SEC’s decision to drop its lawsuit against Ripple Labs.
Despite the uncertainty, there’s still room for optimism. Historical patterns suggest Bitcoin’s cycle peak is still expected later this year, typically 12-18 months after its April 2024 halving. Plus, the fact that Bitcoin hasn’t fully retreated and is currently trading around $84,935 at the time of writing keeps hope alive for those bullish on its future.
Featured image via Shutterstock
