While many were predicting a major bull run year for Bitcoin (BTC), market expert Axel Adler revealed that the major cryptocurrency is at the midpoint of a bear cycle.
A mild bearish cycle compared to history
As of now, Bitcoin has recorded a modest decline of 4% since the beginning of the year. However, the cryptocurrency has shown some stability this week, holding steady in the $89,000 to $94,000 range, with the latter number acting as an immediate resistance line.
According to According to Adler, this correction is about -32% and is considered less severe than previous bear cycles. He emphasized that about 88% of Bitcoin holdings are still in unrealized gains, while only about 12% of the total supply is currently in losses.
Adler points out that Bitcoin's price movement has remained relatively stable within the $90,000 zone, reflecting a modest drawdown in historical context.
A key question as we approach the end of the year is whether this correction will stabilize between -35% and -40% from historical levels. Best everindicates a new, more “flattened” cycle, or whether the market follows past trends that usually lead to deeper declines of -60% to -70%.
Analyzing past cycles, Adler points out that the major bear markets of 2011, 2016, 2019 and 2023 were characterized by a significant increase in the proportion of coins incurring losses, often rising to around 60%. These levels usually indicate the market's yield point.
In contrast, in the current situation, only 12% of carriers experience symptoms such as: unrealized lossThis is very different from the patterns observed in past bear markets.
Can Bitcoin avoid further decline?
Furthermore, experts pointed out that during the peak of the recent local cycle, only about 17% of coins were in the red, a figure that remains three to four times the traditional capitulation level.
This unusual configuration suggests that the current market may resemble a correction within a correction period. bullish super cycle Rather than the final downturn of a full-blown bear market.
Adler believes the market appears to be testing the resilience of this correction structure, which is -32% from its peak, while maintaining a high proportion of profitable positions.
He argues that if Bitcoin can sustain this maximum drawdown above the -35% zone with moderate unrealized losses, the case could be strengthened for a shift to a more “flat” correction, influenced by institutional demand and structural supply shortages.
Conversely, if Bitcoin's correction goes beyond the -40% mark, there is a high chance of a crisis. classic bear market will increase significantly. Such a scenario could pave the way for an even more severe decline, potentially reaching the -60% to -70% range and triggering a complete capitulation phase in terms of unrealized loss indicators.
At the time of writing, the leading cryptocurrency on the market is trading at $93,000, registering gains of nearly 5% and 9% in the 24-hour and 14-day time frames, respectively.
Featured image from DALL-E, chart from TradingView.com
