Bitcoin has fallen to a level of $60,000, which is a significant support level, as the bear market continues to deteriorate further. A new report from Kaiko indicates that the level may be a midpoint for the ongoing bear market rather than a bottom for the cryptocurrency.
Kaiko Research: Bear Market Midpoint and Market Signals
As per a Kaiko report, the sharp correction of the Bitcoin price, a 32% dip from recent highs, is the most significant correction since the 2024 halving cycle. This correction might imply that the asset has come out of the euphoric phase following the halving cycle and is currently experiencing a typical bear cycle, which lasts 12 months before the accumulation phase.
Kaiko’s data shows that several key metrics are pointing to bearish conditions:
- There is a decrease in the overall trading volume on the main centralized platforms by approximately 30%.
- Open interest for combined Bitcoin and Ethereum futures has decreased by around 14%, a measure of deleveraging and reduced speculation.
- Dominance of stablecoins the share of stablecoins to the overall market capitalization surpassed the threshold of 10 %, which is traditionally observed in strong defensive positions during the bear market.
Such indicators demonstrate that the market is favoring caution and capital preservation, characteristics that are common in more pronounced corrective phases rather than uptrending markets.
Also Read: Bitcoin Price Analysis: BTC Trades Near $69,000 as Daily RSI Slips Toward 30
Is $60K a Bear Market Bottom?
The big question on the minds of most traders is if the $60,000 area is a genuine bear market bottom. Although Kaiko’s report indicates that this price level may represent a mid-cycle mark, analysts warn that bottoming processes are often drawn-out.
Lately, Bitcoin has bounced back above the $70,000 mark after a sharp fall; although the bounce was somewhat due to the stabilizing of other risk assets as well, the macro environment still plays a significant role in the BTC price movement, as seen with the equities and commodity market sentiment.
Analysts point to technical levels such as the 200-week moving average at these levels as possible bases, but others caution that a sustainable base often involves a consolidation phase with higher volume, not just a reaction from oversold levels.
Market Conditions and Volatility Context
Bitcoin’s latest fall is a result of general market pressures, including:
- Macro risk-off sentiment prevailing in the global markets and affecting risk assets.
- More liquidations and deleveraging of positions, especially in derivatives markets, as traders cut positions due to market volatility.
- Technical analysis indicates that sideways movement may be a precursor to further breakdowns if these levels are broken.
Nevertheless, the current volatility also offers opportunities for traders and long-term holders, with some accumulating at dips with defensive sentiment readings that have approached historic extremes.
Also Read: Bitcoin (BTC) Whales Accumulate $4.7B BTC During Market Dump
