As turbulence sweeps the cryptocurrency market, Bitcoin has plunged below the average cost base of short-term holders, triggering waves of anxiety throughout the crypto landscape. CryptoQuant data indicates that this persistent downturn—which has stretched over the past four months—points beyond a simple correction, hinting at the early stages of a classic bear market. Analysts underscore that the near standstill of fresh capital inflows has amplified market illiquidity, intensifying downward price pressure.
Short-Term Holder Losses Signal Bear Market Onset
According to CryptoQuant analyst ‘Darkfost,’ the scope of the recent sell-off became starkly apparent in Wednesday’s market analysis. As Bitcoin retreated to around $67,000, short-term investors who entered the market at an average price of roughly $94,200 are now facing unrealized losses approaching 28%. This sustained period with prices remaining beneath investors’ cost bases mirrors the prolonged, high-stress stretches witnessed in the last two significant crypto bear markets.
Driving much of this negativity is the evaporation of new investment. Where bullish periods typically see traders “buying the dip,” the momentum has shifted toward rapid exit from existing positions. Market experts observe that a net outflow of new market entrants is failing to absorb the sell pressure—an early hallmark of bear phase conditions.
Technical assessments highlight additional warning signs. Noted crypto analyst ‘Daan Trades Crypto’ points to the breach of the critical .382 Fibonacci retracement level by Bitcoin. By failing to maintain this line, Bitcoin has disrupted what many consider a cyclical pattern—leaving the $57,800 mark (.618 Fibonacci) as the next significant support to watch.
Long-Term Accumulation Provides a Glimmer of Hope
Despite the prevailing gloom, Bitfinex analysts suggest a more optimistic outlook, describing the current market action as a “mid-cycle reset” rather than an end to bullish momentum. They point to evidence that long-term holders have resumed accumulating Bitcoin after several months of distribution, pushing their collective reserves to 14.3 million BTC. This strategic stacking by so-called ‘whales’ hints that the ongoing pullback could ultimately prove to be a healthy correction, not a terminal collapse.
Nevertheless, Bitcoin continues to grapple with selling pressure, trading at $67,200 during the Asian session. Market sentiment remains even more fragile for Ethereum, with the world’s second-largest cryptocurrency slumping below the psychologically critical $2,000 threshold to reach as low as $1,950—levels reminiscent of March 2025 lows. While this does not yet mark a new trough after April 2025’s major crash, there is little sign of widespread recovery across the altcoin market.
Market observers widely agree that, barring an influx of new capital, testing of lower support zones is likely to persist. The intensifying losses following Bitcoin’s slip beneath $66,000 have notably dampened risk appetite among traders. In the days ahead, broader macroeconomic data and potential institutional moves are expected to be key factors in charting the market’s next direction.
