Bitcoin has started to show clear signs of weakness, and the recent move back below six figures has forced a reassessment of the near-term outlook. With several important technical and on-chain levels now lost, I have recalibrated my base case so that the probability of retesting new all-time highs in the coming weeks has fallen below 50%. That can change quickly if major levels are reclaimed, but until then, the conditions resemble a market shifting away from trending strength and toward a deeper corrective phase.
“Buying The Dip”
Bitcoin is already in a sizeable pullback, but buying every decline isn’t always the optimal approach outside of a confirmed bull trend. In a bear-market environment, what appear to be attractive dips can still lead to significantly lower prices. Short-term rallies and sharp retracements are typical in downtrending markets, so reacting to data rather than pre-emptively predicting a bottom becomes far more important.
This pattern of multiple dips is evident when we analyze the Short-Term Holder Realized Price chart during the last cycle. It is also clear to see how this metric acted as a key resistance throughout this phase, with sustained recovery only experienced once BTC reclaimed STH Realized Price levels.
Figure 1: As observed in the last cycle, there were multiple dips before we reached the market bottom.
There is one caveat: if price meaningfully reclaims key levels, the entire picture shifts. That’s why a small allocation on this dip can make sense, while holding off on further buying until we see deeper macro confluence is a more defensive approach.
Key Levels To Watch
The MVRV Z-Score and the Bitcoin Realized Price give a clearer sense of where the broader market’s cost basis sits. The realized cost basis of the network currently clusters around the mid-$50,000s, but this figure continues rising on a daily basis.
Figure 2: Historically, bear market bottoms occur when BTC’s price sits below the Realized Price.
A similar narrative emerges from the 200-Week Moving Average, as this also currently sits in the mid-$50,000. Historically, points where this metric meets price have presented strong long-term accumulation opportunities.
Figure 3: The 200WMA also suggests an accumulation point of $55k, albeit rising daily.
Those levels rise slowly each day, meaning a potential bottom could form at $60,000, $65,000, or higher, depending on how long Bitcoin spends trending downward. The important point is that value tends to emerge when spot price trades close to the average historical cost of the network, and confluence is provided from key levels of buy support.
Supply & Demand Signals
Value Days Destroyed (VDD) Multiple remains an important metric in identifying stress points among long-term and experienced holders. Very low readings suggest large, old coins are not moving, which has often aligned with market bottoms. A sharp spike, however, can indicate capitulation pressure, which often accompanies or precedes significant market turning points.
Figure 4: Current VDD Multiple readings illustrate that the larger and more experienced players in the market are still very active.
Right now, the metric continues rising as price falls, suggesting many holders are distributing into weakness. That’s not characteristic of a cycle bottom, where forced selling is usually extreme and compressed into a short window. At this stage, the market still appears to be unwinding rather than exhausting. Alongside this, Long-Term Holder Supply has been in a downtrend. Ideally, this stabilises and begins to increase again before calling any major bottom, as bottoms form when the most patient participants begin holding, not exiting.
Funding Rates
Periods of peak fear tend to show up clearly through heavy short positioning, negative funding as shown in the Bitcoin Funding Rates, and large realized losses. Those conditions signal that weaker hands have capitulated, and stronger hands are absorbing that supply.
Figure 5: Typically, occasions when BTC funding rates are heavily negative have signalled major market lows followed by price rallies.
The market has not yet shown the signature panic selling and shorting often associated with major cyclical lows. Without stress in derivatives and without a rush of loss-taking, it is difficult to argue that the market has fully flushed out.
Levels That Must Be Reclaimed
Suppose the bearish scenario is wrong, which of course would be the preferred outcome. In that case, Bitcoin needs to begin reclaiming key structural levels, including the $100,000 psychological zone, the Short-Term Holder Realized Price, and the 350-day moving average as depicted in the Golden Ratio Multiplier chart.
Figure 6: BTC must demonstrate a sustained reclamation of its 350DMA to signify a return to bullish ways.
Temporary wicks or single-day closes are not enough. Sustained closes above these levels, along with strength in risk assets globally, would suggest the trend is shifting. But until that happens, the data leans cautious.
Conclusion
Since breaking below several important levels, the outlook has become more defensive. There’s no structural weakness in Bitcoin’s long-term fundamentals, but the short-term market structure doesn’t resemble a healthy bull trend.
For now, the recommended strategy consists of not buying at every dip, waiting for confluence before heavy scaling in, respecting macro conditions and ratio trends, and only turning aggressive once the market proves strength. Most investors never identify the exact top or bottom; the goal is to position near areas of high probability with enough confirmation to avoid months of unnecessary drawdown.
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My Bitcoin Strategy Going Forward
Matt Crosby
Lead Analyst - Bitcoin Magazine Pro