Bitcoin (BTC) Price Crash Sparks Fears the Bear Market Could Be Here, Experts Warn

Bitcoin slumped to $49,000 on Monday from as high as $61,000, wiping out billions of dollars from leveraged traders.

The latest sharp decline in the price of Bitcoin has sparked concerning indications that the bear market may already be brewing, according to experts.

Bitcoin's price plummeted to $49,000 on Monday from a high of $61,000, wiping out billions of dollars in leveraged traders' positions. In response, Ethereum came close to losing the $2,000 threshold. Solana (SOL), too, nearly dropped back below the $100 mark.

However, to the surprise of many, by the next day, Bitcoin had already recovered to above $55,000, helping Solana rally back to $150. While Bitcoin continues to hold on to recent gains, showing signs of continuation toward $60,000, the bearish fears have not yet subsided.

Early Signs of Bear Market

In a recent update, Julio Moreno, head of research at the analytics platform CryptoQuant, revealed that the Bull-Bear Market Cycle Indicator signaled a BEAR phase on Tuesday for the first time since January 2023.

Moreno highlighted that earlier instances when the indicator briefly signaled a BEAR phase included the COVID-19 market crash in March 2020 and the Chinese mining ban in May 2021. It also accurately predicted the onset of the bear market in November 2021.

This observation has garnered significant attention within the crypto community. Responding to the findings, Ki Young Ju, founder of CryptoQuant, stated that as long as Bitcoin’s price remains above $45,000, it has the potential to reach a new all-time high within a year.

He acknowledged that some market indicators have flashed bearish signals since the recent steep drop. However, Young Ju suggested that these signals could reverse if a rebound occurs.

To that end, he proposed observing Bitcoin's performance over the next week or two for further confirmation. Young Ju noted that if it remains stuck around its current threshold for an extended period—especially longer than a month—it could signal a weakening market sentiment.

Consequently, the risk of entering a prolonged bear market increases, and recovery could become more challenging when bearish conditions persist beyond this period.

Indicators Flashing Bullish Signal

Despite the bearish fears, some other indicators are giving market participants reasons to be bullish. In a separate update, on-chain analyst Ali Martinez pointed out that the crypto market has returned to a state of extreme fear, which he believes presents a prime buying opportunity for Bitcoin.

Earlier, Martinez noted that while short-term holders were liquidated during the recent dip to $49,000, long-term holders were actively accumulating. He highlighted that these long-term holders added over 184,500 BTC to their portfolios, which is valued at around $10 billion.

Bolstering this trend, recent data shows that more than 404,000 BTC, valued at over $23 billion, have been locked in long-term holders' wallets.

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