Bitcoin sentiment sours as analysts warn of deeply bearish conditions

CryptoQuant warned in its Asia Morning Briefing that Bitcoin is now entering an extremely bearish phase. On-chain data shows that BTC is hovering around $101,000 as the Friday trading day began in Hong Kong.

At the time of publication, Bitcoin is currently exchanging hands at $101,970, down 1.22% in the last 24 hours. BTC has also plummeted by nearly 7% in the past week and more than 16% in the last 30 days.

BTC drops below the 365-day moving average

CryptoQuant revealed in its latest weekly report that BTC dropped under the 365-day moving average of $102,000. The analytics firm argued that the drop indicated the loss of a key technical and psychological support that previously defined the bottom of the bull cycle. 

CryptoQuant’s Bull Score Index has plummeted to zero for the first time in more than 3 years. The signal was also last seen before the previous bear market. The analytics firm revealed that traders’ on-chain realized price bands indicate a potential downside move towards $72,000 if BTC fails to rally above $100,000 soon.

The market data firm cited Metcalfe’s network valuation model, which also identified $91,000 as the next structural support level. The firm believes that failure to reclaim the 365-day moving average quickly could trigger a much larger correction.

The analytics report comes as Bitcoin has seen weeks of weakening fundamentals, including increased outflows, lower network activity, and a flattening of key on-chain valuation metrics. CryptoQuant analysts argued that BTC’s chart resembles a similar break in 2021 below the metric, which initiated the start of a prolonged drawdown.

Bloomberg analyst Mike McGlone stated on Thursday that Bitcoin’s price may decline by nearly 50% if the current downward trend over the past month persists. He also believes that if BTC hits $100,000 could accelerate a drop toward $56,000.

Bitcoin had dropped to $98,000 on November 4, which marks the current local bottom. It was also the first time since July that BTC plummeted below the $100,000 psychological level.

Glassnode says BTC’s market remains cautious and oversold

Analysts at XWIN Research Japan stated on Thursday that BTC’s Market Value to Realized Value (MVRV) has declined to historical lows. The firm confirmed that historical MVRV drops to the 1.8-2.0 range often coincides with mid-term market bottoms or early recovery phases.

Glassnode’s report earlier this week, titled ‘Defending $100K’, revealed that a normal correction within the ongoing cycle could be one key Bitcoin metric that indicates the recent drop. The report also revealed that 71% of the market’s supply is still in profit, and unrealized losses are contained to just 3.1% of market cap. The firm believes that the current reading of 3.1% suggests only moderate stress, unlike the 2022-2023 bear market, where losses reached extreme levels.

Glassnode added that it’s useful to assess the Relative Unrealized Loss, which measures the total unrealized losses in USD relative to market capitalization. The firm maintained that the market can be classified as a mild bear phase, characterized by orderly revaluation rather than panic, as long as unrealized losses remain within the current range.

The analytics firm argued that the data shows the market remains cautious, oversold, but not yet deeply capitulated. Glassnode also acknowledged that long-term holders are selling and ETF outflows continue, but believes it’s just a mid-cycle correction rather than the start of a bear market.

Analysts have been debating Bitcoin’s short-term trajectory, with ARK Invest’s Cathie Wood reducing her long-term Bitcoin price projection by $300,000 on Thursday. She warned that stablecoins are eroding the world’s largest digital asset’s role as a store of value in emerging markets.

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