Bitcoin in Deep Bear Phase: What Indicators Reveal About the Next Move

The cryptocurrency market is currently facing a well-defined bear phase. Bitcoin experienced sharp declines that tested the $60,000 zone, although a wave of buying prevented a deeper break. The recovery to current levels near $68K does not indicate a complete reversal of the downtrend but rather a pause amid a broader correction. Investors remain uncertain about the next direction, with the possibility of further losses looming over the market.

Market Indicators Confirm the Intensity of the Bear Phase

The Unrealized Loss metric is a reliable thermometer for measuring the depth of a bear phase. When Bitcoin fell toward $60,000, this indicator reached approximately 24%, a level significantly above the range that typically marks the transition from optimistic to pessimistic markets. This level suggests that the market is firmly positioned in a downtrend territory, with widespread selling pressure.

However, this is not the extreme point. Truly deep capitulation levels usually exceed 50%, signaling near-total exhaustion. Bitcoin, therefore, remains in the intermediate capitulation phase — neither in full recovery nor at the definitive bottom. Selling continues frequently, fueling volatility as the market seeks a new balance.

Investor Behavior Reveals Divergence of Sentiments

An analysis of the behavior of different investor categories exposes an interesting dynamic. Small holders (less than 0.01 BTC) are gradually increasing their participation in the network, adopting an accumulation stance even amid adverse conditions. These smaller investors typically react with emotional volatility, but currently seem to see current prices as attractive opportunities.

Meanwhile, medium and large wallets (10 to 10,000 BTC) have slightly reduced their holdings during the recent decline. This divergence is notable especially considering that social media sentiment remains strongly negative. While most online conversations reflect pessimism, small investors continue quietly accumulating positions, demonstrating a disconnect between verbal sentiment and actual buying behavior.

This gap between sentiment and action is crucial. In more extreme bear phases, retail selling usually closely follows the prevailing negative mood. As long as small holders maintain this accumulation pattern, short-term recoveries may struggle to consolidate, keeping rallies limited.

Network Activity Offers a Different Signal on Support

Bitcoin network data paint a different picture from price pressure. Last week, the platform recorded a robust increase in new active addresses, with new participants transacting around 37% more. This growth indicates that new users continue to join the network even as prices face pressure.

This influx of new participants often occurs during volatile periods, when investors seek to position early in anticipation of potential future recoveries. While this movement does not guarantee an immediate price jump, the increasing number of active addresses points to ongoing confidence in Bitcoin’s long-term value. The expanding user base can serve as a price buffer during consolidation phases.

However, if broader economic pressures persist globally, even strong network activity growth may not be enough to counteract the risk-averse sentiment permeating international markets.

Where Bitcoin Might Find Support and Resistance in the Next Moves

Currently, BTC is trading around $68.01K after rebounding from the support at $63.007 during recent volatility. Aggressive buying prevented a decline to $60,000, revealing interesting demand levels at lower zones. Even with this recovery, the risk of additional pressure remains significant, especially considering the broader macroeconomic context.

If the $63.007 level is broken, it would confirm an extension of the downward move, with the next potential support around $55,500, based on historically tested price zones. On the other hand, if new address activity continues to grow and sustain demand, Bitcoin could encounter resistance and stay above $71,672 as a sustained level, easing short-term outlooks even if the larger bear phase remains in effect.

The trajectory over the coming weeks will depend on the balance between technical pressure, network participant behavior, and global macroeconomic sentiment. Bitcoin is at a turning point, where small changes in momentum could determine whether consolidation prevails or further declines unfold.