Bitcoin is falling, but don't call it a bear market yet: Analyst

Bitcoin fell below $95,000 on Friday morning and appeared to have stabilized by early afternoon, but fell back below that level in the afternoon. the analyst said decryption Volatility from panicked short-term holders appears to have subsided, at least for now.

” Bitcoin The market is highly influenced by the profitability of new participants representing fresh capital and liquidity. Dynamic upward price trends are typically sustained when these new investors are making profits, which builds market confidence,” said Craigie Block, a popular pseudonym CryptoQuant analyst. decryption.

They explained that a period of panic selling begins when short-term holders start seeing losses of 20% to 40%.

“This level of pain traditionally signals the transition to a full-blown surrender phase,” they said. “Given the current level of losses for this cohort, we are still far from the classic sign of a macro bear market.”

However, support will increase if new entrants realize some gains, and the decline will be a “mid-cycle correction” rather than the start of a bear market, the analyst added.

decryption He spoke with other analysts early Friday who differed on whether Bitcoin's recent decline marked the beginning of a bear market.

At the time of writing, Bitcoin was trading at $95,390, after falling 2.8% from the previous day and 7.5% from last week. With Bitcoin falling below $100,000 for the third time in a month, daily liquidations now exceed $1 billion. Before that stretch, the last time Bitcoin traded below six digits was back in May.

Sentiment about the year's final Federal Reserve meeting and its impact on federal interest rates is changing. Traders believe there is a 56.4% chance the Federal Open Market Committee will keep interest rates unchanged on Dec. 9, according to aggregated derivatives data. Just a month ago, traders were estimating a 94% chance that the FOMC would cut rates again by 2026, according to the CME FedWatch tool.

Typically, when the FOMC lowers interest rates, risky assets like Bitcoin and stocks tend to benefit, while safe assets like government bonds become less attractive to investors.

However, investor pessimism is hitting cryptocurrencies harder than stocks. Wintermute analysts said: decryption Compared to equity proxies like the Nasdaq 100, cryptocurrencies are heavily negatively skewed.

“This macro rotation occurred at a time when the market had already tested and defended the $100,000 level twice previously, this time leading to a significant push below $100,000,” they wrote.

Dilin Wu, research strategist at Pepperstone, advised traders to remain cautious in the short term as the market has not yet shown signs of a sustained recovery.

“In the medium to long term, Bitcoin remains capable of challenging new highs, but this will depend on improving sentiment, restoring liquidity, and moderating volatility,” she said. decryption. “The four-year cycle is still instructive, but it's far from the rule. I'm more focused on actual market participation and funding conditions than purely on cyclical patterns.”