Key Takeaways:
- •Analysts expect selling pressure to persist into year-end as recent buyers unwind BTC and ETF positions.
- •Bitcoin’s rebound from the ~$82,000 Real Market Average suggests capitulation may be underway but not complete.
- •A confirmed bottom requires renewed accumulation from long-term holders and continued reduction in leveraged long trades.
The pullback has already erased a significant portion of the gains accumulated during the summer rally, and institutional flows suggest that sellers have not fully stepped aside.
Analysts Warn of Continued Selling Toward Year-End
Research firm Compass Point expects investor positioning to remain a headwind for Bitcoin in the short term. According to the firm, the recent correction has been driven largely by newer market entrants — many of whom opened positions during the move above $100,000 — now unwinding exposure as sentiment turns risk-off.
Bitcoin is currently hovering near $91,200, down more than 20% in the last 30 days and almost 30% below its early-October peak of just over $126,000. Analysts cite the combination of leveraged liquidations, rotation from crypto into traditional safe-haven assets such as gold, profit-taking in AI-linked equities, and cyclical expectations surrounding Bitcoin as the main drivers behind the decline.
Compass Point analyst Ed Engel argues that the washout phase isn’t unusual. Historically, Bitcoin bear cycles end when tokens migrate from short-term speculators to high-conviction holders. Engel believes the current wave of capitulation from investors who bought at five-figure prices could be part of that process.
ETF Investors Closely Watched as a Market Signal
Bitcoin spot ETFs have become a crucial sentiment indicator, and Engel notes that inflows and outflows from these funds are directly shaping price direction. He points to Bitcoin’s recent rebound from the “Real Market Average” level around $82,000, which reflects the aggregate cost basis of ETF investors this cycle.
A true bottom, however, requires further confirmation. Engel says his team is waiting for two conditions before adopting a bullish stance: an increase in net holdings by long-term investors (HODLers), and sustained negative forward funding rates, which signal the unwinding of overheated long leverage.
Although the analyst does not expect a downturn as deep as previous crypto bear markets, Compass Point maintains that the coming weeks may remain uncomfortable for traders until high-conviction buyers begin absorbing supply from weaker hands.
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