[Analysis] "Bitcoin in the mid-to-late stages of a bear market…bullish reversal still not yet"

An analysis has suggested that Bitcoin (BTC) may be in the mid-to-late stages of a bear market.

Crypto analytics firm Glassnode said in its weekly report on the 25th (local time) that “Bitcoin is moving sideways in the $60,000–$70,000 range, down 47% from its all-time high,” adding that this is “a pullback magnitude historically similar to the mid-to-late phase of bear markets.” Glassnode said the risk of re-entering a downturn phase “remains elevated” if Bitcoin fails to “decisively reclaim levels above $70,000 within the next few weeks.”

Glassnode underscored that “about 9.2 million bitcoins are currently underwater.” Glassnode explained that “Total Supply in Loss measures the amount of Bitcoin whose cost basis exceeds the current spot price, indicating how widespread unrealized losses are,” adding that “the 7-day moving average of this metric has risen to about 9.2 million, showing that nearly half of circulating supply is in loss.” It continued, “Such a high level of potential sell supply is historically a feature seen in the later stages of bear markets,” adding that “while volatility and fragility persist, it appears closer to a zone where a potential bottom forms than the initial drawdown phase.”

However, the analysis says buying interest has yet to meaningfully pick up. Glassnode noted that “with Bitcoin trading in the $60,000–$70,000 range throughout February, the path ahead is likely to be determined by the pace of new demand inflows,” adding that “the Accumulation Trend Score has remained below 0.5 since the 5th of last month, suggesting there has been no aggressive accumulation led by large investors.” It said, “This means conviction buying has not yet fully materialized,” adding that “until a more solid bottom is established, the likelihood of further downside remains high.”

Glassnode pointed out that “spot selling pressure and ongoing exchange-traded fund (ETF) outflows suggest structural demand remains constrained.” It added that “while derivatives positioning has largely been reset and fear-driven hedging has eased, this is not a signal that the market is shifting into a bullish regime,” and concluded that “for a sustainable uptrend to develop, reabsorption in spot markets, steady accumulation by large investors, and a clear turn in institutional flows are needed.”