Author: Yue Xiaoyu
The price of Bitcoin has dropped from 120,000 to 90,000, nearly a 30% decline.
I have been dollar-cost averaging into Bitcoin for three years, yet I still haven't sold at the peak.
I have been regretting why I didn't sell at 120,000.
Now my returns have pulled back significantly.
I am very afraid that I will experience a rollercoaster of wealth.
If the four-year cycle theory of the Bitcoin market is not broken,
it means I will have to wait another four years.
How many four-year periods are there in life?
So, has the bear market started now?
I believe that not just me, many people also want to know the answer.
To avoid various market noises affecting my judgment, and of course, to give myself some psychological comfort, I used various analytical frameworks to conduct a comprehensive assessment, and the conclusion is still quite optimistic.
Everyone can join in for some psychological comfort.
Fear and Greed Index
The current index is 15 (extreme fear), and market panic has persisted for a month.
Extreme fear often accompanies a selling cycle, reinforcing downward pressure.
If the index remains below 20, it may trigger further liquidations.
However, from historical data, extreme fear is often a buying opportunity.
The current panic may be close to the bottom, and there will likely be a short-term rebound.
This analytical framework indicates that we are in a short-term bear market, but not a transition from bull to bear.
Technical Analysis
The 50-day / 200-day MA indicator has confirmed a death cross (short-term MA crossing below long-term MA), similar to the starting point of the 2022 bear market.
From a technical perspective, we are seeing strong bear market signals, with a trend reversal, and a lower target of 74,000-80,000 USD.
The RSI (14-day) indicator has quickly dropped from 70+ (overbought) to 35 (oversold), accompanied by high volatility. The short-term oversold condition suggests a rebound, but without breaking 30, there is no strong reversal.
Therefore, from the technical indicators, it is clear we are in a bear market, but the oversold state suggests a possible rebound within 1-2 weeks.
Fundamental Analysis
ETF inflows: 61.9 billion USD inflow for the year, but turned to outflows after Q3. Institutions (like MicroStrategy) are still accumulating, but retail panic has intensified selling pressure.
Market liquidity: First, the U.S. government shutdown prevented Treasury funds from entering the market, and coupled with increasing disagreements over interest rate cuts in December, overall uncertainty has intensified.
The correlation between Bitcoin and traditional markets has risen to 0.6-0.7, influenced by interest rates, inflation, and liquidity, with macro tightening still predominant in 2025.
From a fundamental perspective, we are still in a bull market, or even a long-term bull market; the massive liquidity has not yet arrived, but short-term outflows are considered market corrections.
On-Chain Data Analysis
Active addresses: Down 20% from the peak.
Transaction volume: Plummeted by 30%.
Holding addresses: Long-term holders (>1 year) account for 65%, and the UTXO age distribution shows accumulation, not panic selling.
On-chain weakness indicates that the market is very bearish, but holding behavior data shows that we are not in a complete collapse.
Market Cycle Analysis
The traditional four-year cycle driven by Bitcoin halving has transformed in 2025, mainly influenced by ETFs and the entry of traditional capital.
Typically, 19 months after halving, the historical peak price should be higher, but the dynamics have changed due to ETF absorption of supply, weakening the peak impact.
Similar to the late cycle of 2017, there will be a rebound after a 20% drop.
Thus, the bull market may extend until 2026, with a target price still at 200,000.
In Summary
Have we entered a bear market now?
In the short term (1-3 months), we have entered a bear market correction, with technical / on-chain / macro indicators consistently showing downward pressure, targeting 70-80k, with a probability of 40%.
However, we have not entered a full bear market; institutional ETFs and on-chain holding behavior indicate that the fundamentals are still solid, with no risk of collapse, and the cycle may extend until 2026.
How will the market develop next?
Further pullback, testing the bottom at 70k, with a probability of 15%;
Continued consolidation, oscillating up and down, using time to exchange for space, with a probability of 50%;
Subsequent rebound, returning above 100k, or even reaching new highs, with a probability of 35%.
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