Matrixport: Bitcoin Remains In Bear-Market Territory As US Dollar Weakness Supports Risk Assets

Matrixport, a provider of cryptocurrency-financial services, has published a revised market outlook indicating that, while Bitcoin continues to trade within conditions typically associated with a bear market, the firm maintains a comparatively constructive view on broader risk assets. 

The assessment points to on-chain indicators and technical signals, including Bitcoin’s position below its 21-week moving average, as evidence that downside pressure remains present. 

The analysis also highlights the historical tendency for weaker performance during US midterm election years, which often align with the fourth year of Bitcoin’s market cycle, a phase that has frequently coincided with price declines.

Despite these headwinds, Matrixport argues that the global reflation narrative remains in place, supported by ongoing weakness in the US dollar. 

According to the report, a softer dollar environment effectively encourages investors with dollar-denominated portfolios to remain exposed to risk assets in order to protect real purchasing power. 

The firm further notes that the absence of a policy response to counter recent dollar depreciation has been interpreted by market participants as an acceptance of continued currency weakness. 

This shift is viewed as particularly important at a time when international investors are already increasing efforts to diversify away from US-centric allocations. As a result, the report concludes that reflation-oriented investment strategies are likely to remain supported over the near to medium term.

Bitcoin Slides Nearly 6%, Crypto Market Sheds $300B And Liquidations Exceed $1.8B

At the time of writing, Bitcoin was changing hands at $82,437, reflecting a decline of more than 5.89% over the previous 24 hours. During that period, the asset reached an intraday high of $87,996 and fell to a low of $81,311, according to data from CoinMarketCap.

The broader digital asset market also experienced a sharp downturn in early trading, with total market capitalization sliding from approximately $3.1 trillion on Wednesday to slightly above $2.8 trillion, representing a contraction of around 6%. The scale of the sell-off places the session among the most significant one-day declines since the liquidation wave on October 10th, when market turbulence linked to tariff-related remarks by US President Donald Trump erased nearly half a trillion dollars in total value within just over a day.

Forced liquidations accelerated as prices weakened. Figures compiled by Coinglass indicate that more than $1.8 billion in leveraged cryptocurrency positions were closed over the past 24 hours, with long positions accounting for the majority of the losses.

The sharp market reversal coincided with a pronounced shift toward risk aversion, as overall investor sentiment deteriorated to an “extreme fear” reading of 16, down from 26 recorded the previous day.

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