Tom Bruni, head of markets & retail investor insights at Stocktwits, also weighed in, stating that “the macro trade is clearly ruling the market right now, with Nvidia’s earnings unable to reignite momentum for the bulls.”

Bear Market Conditions

The analyst also cited other variables as helping drive bitcoin’s recent losses, emphasizing that cryptocurrencies in general are displaying signs that they are in a bear market.

“The latest decline in Bitcoin, Ethereum, and the broader crypto market is a continuation of the bear-market behavior that began with prices failing to hold their new highs in early October,” he stated. “Since then, critical support levels near 100-110k in Bitcoin and 3,700-4,000 in Ethereum broke, leaving the market in a short-to-intermediate downtrend and long-time sideways pattern.”

“Sentiment was clearly stretched over the summer, with digital asset treasury companies (DATS), new ETF filings, and a flurry of headlines around the collapse of the US Dollar driving interest in crypto,” noted Bruni.

“However, price action failed to reflect any of those bullish developments and has been selling off in the face of broad-based strength in other assets like equities and precious metals,” he stated.

“Now, with labor market concerns and a more hawkish Fed stance controlling the narrative, we’re in a market where the negative side of any news takes precedence over the positive spin. This is a major headwind for all risk assets, especially those like Bitcoin and Ethereum, which have lagged in performance since April,” Bruni emphasized.

Andre Dragosch, head of research – Europe for Bitwise, also spoke to the weak nature of crypto market conditions.

“It seems as if there is general de-risking in the market right now due to concerns over an AI bubble, Japanese sovereign debt and declining odds for a December Fed rate cut,” he stated via email.

“Bitcoin investors are starting to worry about the possibility of a bear market although this latest correction is still in line with previous interim bull market corrections both in terms of depth and duration,” said Dragosch.

“Sentiment indicators already signal a high degree of “pain” in the market especially among short-term holders, i.e. rather unsophisticated investors which implies that a reversal could happen anytime,” he emphasized.

Exchange Inflows

One analyst had a completely different take on the subject, choosing to focus on the increased migration of bitcoin to exchanges, a development that frequently comes before market participants sell the digital asset.

“One thing that has surfaced in the last couple of days is larger exchange inflows for Bitcoin, which are putting further downward pressure on the price,” Julio Moreno, head of research for CryptoQuant, stated via Telegram.

The chart below illustrates this activity:

“Hourly exchange inflows for Bitcoin were larger these last few days than in October 10, when the big crypto liquidation happened,” he added.

Mixed Market Outlook

Going forward, analysts their views on how bitcoin will perform.

“Bitcoin could still trade lower in the short term until a clear bullish catalyst emerges such as Fed resumption of QE, or jitters in the bond market which would entail interventions by the Fed as well,” stated Dragosch.

However, in the long-term, he offered a more optimistic take.

“We still expect the bitcoin bull cycle to extend well into 2026 due to monetary easing across the globe which tends to affect global growth conditions and risk appetite with a significant lag.”

Bruni also weighed in, stating that “Looking at crypto specifically, we may be seeing some signs of bottoming in the days/weeks ahead.”

“Sentiment on Stocktwits is sitting at YTD lows and traditional momentum indicators like the relative strength index (RSI) are experiencing their first oversold readings in many quarters,” he stated. “Add to that, DATS like Strategy are reaching deeply oversold levels and others like ORBS have fallen sharply (nearly 97% from its highs).”

“Sentiment is certainly in the process of becoming washed out.”