Bitcoin Falls Below $90,000: Bear Market Confirmed, or Has the “Discount Season” Arrived? — A Clear Look at the Current Market

Long Positions Liquidated Across the Board, Market Losing Support

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  Bitcoin longs alone saw $328 million in liquidations, which contributed to the price accelerating downwards in succession.
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  High-beta sectors such as Layer2 and DeFi were impacted even more severely.

Here's a look at 24-hour sector performance:

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  Layer2: -7.9%
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  DeFi: -6%
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  PayFi: -4.11%
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  Layer1: -4.17%
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  NFT: -3.9%
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  MEME: -3.51%
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  AI: -3.66%

Short-Term Holders Almost Completely Wiped Out

On-chain data indicates that approximately 2.8 million BTC held by short-term holders (STHs) are now almost entirely at a loss. This represents the largest concentrated loss zone observed since the FTX collapse. With nearly all short-term held coins in the red, technical traders, stop-loss orders, and leveraged positions are likely to continue amplifying the downward price pressure.

Long-Term Holders (LTHs) Are Selling, Whales Are Reducing Exposure

From July to the present, long-term holders have divested more than 452,500 BTC. This is an unusual signal, as continuous distribution by long-term holders suggests a weakening of market confidence.

ETFs See Three Consecutive Weeks of Net Outflows, Institutions Cooling Off

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  Last week, digital asset funds experienced net outflows totaling $2 billion, marking the largest outflows of the year.
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  BTC ETFs specifically saw net outflows of $1.11 billion last week.
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  ETH ETFs recorded net outflows of $728 million.

The cooling of institutional demand is the most apparent it has been in the past three months.

Whale Sell-Off Plus Retail Panic Equals a Negative Feedback Loop

The Fear & Greed Index has consistently remained in the "extreme fear" range of 10–14, and retail investors have largely stopped buying. Following Bitcoin's fall below $100,000, a significant number of stop-loss orders were triggered, pushing the market further down and creating a classic "spiraling negative feedback loop."

View A: The Market Has Not Turned Bearish, We’re in a Discount Phase (“Bull-Market Correction View”)

Proponents of this view firmly believe that the underlying fundamentals remain unchanged. Institutional capital has not disappeared, and central banks and Wall Street continue to embrace cryptocurrencies. Key arguments supporting this perspective include:

1. Coinbase: No Deterioration in Fundamentals

The head of institutional strategy at Coinbase has stated that the current decline is due to mechanical liquidations rather than a change in the underlying trend. They also highlighted the Czech National Bank's purchase of Bitcoin as a "milestone event" and noted that Citi and Morgan are beginning to utilize stablecoins, indicating full engagement from regulated finance with the crypto industry. These developments are considered exceptionally positive compared to previous market cycles.

2. Bitwise CIO: BTC Fundamentals Are Very Strong

The Chief Investment Officer at Bitwise believes that 2026 will be a pivotal year for new all-time highs.

3. CryptoQuant Data: Long-Term Holders Are Accumulating on a Large Scale

Since October, long-term holders have increased their holdings by 186,000 BTC. This represents one of the largest accumulation waves within the current cycle. Historically, periods of such accumulation have been followed by price surges.

4. Binance Australia: No Massive Exit, Retail Still in the Market

Retail investors have not exited the market en masse. Instead, they have shifted their investments out of "high-risk coins" and back into blue-chip assets like BTC and ETH. This behavior is markedly different from the "mass exodus" typically seen in true bear markets.

5. Long-Term ETH Bulls: The Cycle Is Far from Its Top

With Ethereum's upcoming upgrade, growing stablecoin supply, and accelerating asset tokenization, all indicators suggest that the next wave of upward momentum has yet to be unleashed.

The central tenet of this group is that the current period represents a discount phase within a bull market, not the commencement of a bear market.

View B: The Bear Market Is Already Confirmed (“Bear Market Confirmation Camp”)

This group holds the opposing view, asserting that crucial technical indicators have been breached and liquidity conditions are continuously deteriorating, signifying that a bear market has already begun. Their arguments include:

1. BTC Has Broken Below the 50-Week Moving Average (50WMA)

This is a significant technical signal, as Bitcoin has historically never fallen below the 50WMA during a bull market. Previous breaches of this line have exclusively occurred during bear market phases. Bitcoin has now once again dropped below this critical level.

2. Three Consecutive Weeks of ETF Net Outflows, Institutions Withdrawing

This trend is considered a strong and unusual indicator, suggesting a shrinking "reservoir" of institutional demand and a weakening market trend.

3. USDT Share Surging (Bearish Signal)

An increasing share of stablecoins, particularly USDT, typically correlates with declining risk appetite, a characteristic often seen in bear markets.

4. Declining Leverage Demand, Perpetual Funding Rates Collapsing

The monthly funding paid by long positions has decreased substantially, from $338 million to $127 million, a 62% drop. This indicates a vanishing appetite for long-side leverage and a falling market risk preference.

5. Wyckoff Top Structure Appearing

Some analysts observe that the current price action closely resembles the classic "Wyckoff distribution" structure, suggesting that Bitcoin may be tracing a pattern often seen near market cycle tops.

The core belief of this camp is that the bear market has already commenced, and the current downturn is not a short-lived event but rather the beginning of a prolonged period of bottom-building.

View C: The Bear Market Has Already Lasted Six Months and Is About to End (“Bear Exhaustion, Bull Emerging Camp”)

This perspective adopts a more neutral stance. The CEO of Bitwise suggests that the past six months have effectively constituted a bear market, and its conclusion is approaching. His reasoning is based on the following points:

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  ETF Assets Under Management (AUM) have shown minimal decline, indicating that while retail investors may be selling, institutions are largely maintaining their positions.
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  With central banks actively purchasing Bitcoin, Wall Street increasing its involvement in crypto, and stablecoin market caps expanding, the fundamental underpinnings of the market are stronger than ever.

Therefore, this view posits that the current situation is not the start of a new bear market but rather the late stage of an existing one.

1. BTC May Still Have Room to Move Lower

On-chain data reveals a sudden surge in internal exchange liquidity. This pattern is often associated with "panic selling plus liquidity stress" and historically precedes pullbacks. Coupled with low funding rates and negative basis, it is reasonable to assume that Bitcoin may not have reached its ultimate bottom yet.

2. The Real Key Rebound Zone Lies Below $90,000

Several analysts believe that the $89,000 level, representing a further 5% decline, could serve as a near-term rebound zone. The price has already corrected to around the $92,000 range, offering some support for this outlook, but it has not consistently held this level. If this proves to be a short-term bounce, prices could easily revisit levels below $90,000.

Furthermore, if the $89,000 support is broken, BTC could potentially fall back into the $74,000–$82,000 range to find stronger support. The $80,000 mark has been identified by many institutions as a crucial support level for this cycle. Some analysts even suggest that the $80,000–$85,000 range represents a reasonable low point within the Federal Reserve's "liquidity tightening cycle."

3. Key Variable: The Market Impact of 61,000 BTC from the Jian Zhiming Case

The UK Treasury has confirmed that the 61,000 BTC recovered in the Jian Zhiming case will not be added to national reserves but will instead be sold. This decision introduces long-term supply pressure. The critical questions remain:

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  How much of this BTC will actually be sold?
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  When will these sales occur?
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  Will the BTC be sold at a discount?

These factors could trigger a secondary wave of market impact.

4. Institutions Are “Quietly Buying the Dip”

Despite the prevailing extremely bearish sentiment, on-chain data indicates accumulation by "strong hands." Examples include:

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  On the ETH side: one whale acquired 13,117 ETH in the past 24 hours.
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  The ETH treasury company BitMine has accumulated 67,021 ETH within a week.
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  On the BTC side: Strategy (formerly MicroStrategy) purchased 8,178 BTC last week.
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  El Salvador has bought 1,098 BTC in the past 7 days.

These are significant signals, suggesting that large players are accumulating assets in tranches rather than exiting the market.

It is important to note that this article presents an objective summary and analysis of the current market state and existing conditions. It does not offer predictions about the future market or provide investment advice. The following timeless principles offer guidance:

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  In a bull market, never call the top.
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  In a bear market, never call the bottom.
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  In a choppy market, do not attempt to predict the future.