The latest collapse in the price of Bitcoin has sparked significant indications that the bear market could already be at large, experts warn.
Bitcoin slumped to $49,000 on Monday from as high as $61,000, wiping out billions of dollars from leveraged traders. In reaction, Ethereum came close to losing the $2K threshold. Likewise, Solana (SOL) almost plunged back to below $100.Â
Remarkably, by the next day, Bitcoin reclaimed $55K, helping Solana rally back to $150. While Bitcoin continues to defend recent gains, exhibiting signs of continuation toward $60K, the bearish fears have not yet disappeared.
Early Signs of Bear Market
In a recent update, Julio Moreno, head of research at the analytics platform CryptoQuant, revealed that the Bull-Bear Market Cycle Indicator signaled a BEAR phase on Tuesday for the first time since January 2023.
Moreno highlighted that previous instances when the indicator briefly flagged a BEAR phase included the COVID-19 market crash in March 2020 and the Chinese mining ban in May 2021. It also accurately predicted the onset of the bear market in November 2021.
The observation has drawn considerable attention within the crypto community. Responding to the findings, Ki Young Ju, founder of CryptoQuant, stated that as long as Bitcoin’s price remains above $45K, it has the potential to reach a new all-time high within a year.
He acknowledged that some market indicators have flashed bearish signals since the recent steep drop. However, Young Ju suggested that these signals could reverse if a rebound occurs.
As a result, he suggested observing Bitcoin’s performance over the next week or two for further confirmation. Young Ju noted that if it remains stuck around its current threshold for an extended period—particularly longer than a month—it could signal a weakening market sentiment.Â
Accordingly, the risk of entering a prolonged bear market increases, and recovery could become more challenging when bearish conditions persist beyond this period.
Indicators Flashing Bullish Signal
Interestingly, some other indicators are giving market participants reasons to remain bullish. In a separate update, on-chain analyst Ali Martinez pointed out that the crypto market has returned to a state of extreme fear, which he believes presents a prime buying opportunity for Bitcoin.
In an earlier post, Martinez noted that while short-term holders were liquidated during the recent dip to $49,000, long-term holders were actively accumulating. He highlighted that these long-term holders added over 184,500 BTC to their portfolios, worth approximately $10 billion.
Supporting this trend, recent data shows that more than 404,000 BTC, valued at over $23 billion, have been locked in long-term holders’ wallets.
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