Bitcoin’s Bear Market: Examining How Low BTC Could Fall

In the latest market developments, Bitcoin (BTC) experienced a notable dip below the key $90,000 threshold on Tuesday. This downturn raises concerns about the possibility of a new bear market, leading to uncertainty about the future of cryptocurrency. Market analyst Raun Neuner has shared insights regarding the current situation through a post on X (previously Twitter).

Key Takeaways:

Bitcoin fell below the $90,000 mark, raising concerns about a bear market.
Historical patterns suggest that post-peak declines could see BTC dropping to around $37,000.
Current market conditions reflect increased volatility and geopolitical uncertainties affecting Bitcoin.
Key support levels to watch are between $84,000 and $85,000; failure to hold could signal deeper declines.

Bitcoin

Could Bitcoin Reach $37,000?

Neuner pointed out that despite strong performances in the stock market and commodities entering what he describes as a “supercycle,” the cryptocurrency market continues to struggle. This raises an important question: what could be the worst-case scenario for Bitcoin?

Historically, Bitcoin's bull markets have peaked roughly 532 days following each Halving event. Applying this pattern to the present cycle suggests that Bitcoin might have hit its peak around early October, briefly reaching $125,000.

Data from previous cycles indicates that after such peaks, Bitcoin generally experiences a significant decline of about 70% to 80%. If this trend holds true for the current cycle, Neuner estimates that Bitcoin could potentially fall to around $37,000 during a full bear market.

Looking at broader market dynamics provides additional context. After a year of strong performances in both stocks and commodities, market corrections are typically expected. Historically, during periods of risk aversion in equity markets, Bitcoin has often intensified these downward trajectories, contributing to pressure at lower price levels. According to Neuner, a crucial reference point for Bitcoin to watch is the $57,000 level, where the 200-week moving average resides.

Key Support Levels for Bitcoin to Monitor

Recent factors contributing to Bitcoin’s drop below $90,000 are tied to increased volatility in global bond and equity markets, compounded by geopolitical tensions. Market analyst Walter Bloomberg highlighted that recent macroeconomic developments, including fresh tariff threats from former President Trump towards Greenland and Japan's fiscal strategies, have intensified market instability.

As a result, many investors have shifted towards safe-haven assets like gold, which recently achieved a record price exceeding $4,700. Bloomberg cautions that macroeconomic risks may be undervalued by investors.

Additionally, there’s been a rise in demand for protective options within Bitcoin's market, indicating that investors are wary of potential further declines. According to Bloomberg, the next critical support levels for Bitcoin in the near term lie between $84,000 and $85,000. If Bitcoin fails to maintain these levels, the possibility of a deeper bear market could become increasingly concerning.

Bitcoin
The 1-Day chart illustrates Bitcoin's drop below the crucial $90,000 support on Tuesday. Source: BTCUSDT on TradingView.com
Featured image from DALL-E, chart from TradingView.com