DeFi Report, a cryptocurrency analytics and data platform, shared a comprehensive assessment of Bitcoin ($BTC) and the broader cryptocurrency market in its latest report.
Analyzing the bear market that lasted approximately 9.5 months (287 days), analysts made critical observations at the intersection of on-chain metrics, buying group behavior, and global macroeconomic risks.
According to analysts at DeFi Report, based on past bear market cycles that lasted an average of one year, about 80% of the current downturn is behind us. Noting that the market has seen three major corrections exceeding 30% so far, analysts highlighted investor psychology and capitalization types.
In addition to panic selling triggered by sharp market declines, “time erosion,” caused by prices remaining within a narrow range for extended periods, continues.
Investors who bought at record highs transferred 52% of their Bitcoin holdings to new, longer-term holders. The group that bought Bitcoin between $92,000 and $108,000 showed surprising resilience, selling just 18% of its assets. However, analysts predict that if the process continues, the liquidation of this group could reach 20-30%.
The company, which considers $65,000 to be the fair value of Bitcoin, highlighted the number of days $BTC traded below or around this level. During the 2022 bear market, there have been 107 days below fair value, while in the current cycle this period has so far only reached 47 days. The fact that the decline in market capitalization has remained at 5.8%, compared to losses of 19% in previous cycles, indicates that the market has matured and that spot ETFs are supporting the market. Nevertheless, analysts continue to estimate the probability of the price reaching a new low at 65%.
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The report highlights two key levels regarding the direction of Bitcoin price. The first is the $63,000 level, which is the main lower support zone above which the price is trying to hold. The second is the $70,000 to $73,000 range, which represents the upper resistance and support reversal zone that must be overcome to confirm the bull market and break the downtrend. Barring further systemic collapse of the sector, $BTC is expected to form a time-sensitive floor between $60,000 and $70,000. However, a strong shock could drop the price into the deep value zone between $50,000 and $55,000.
The DeFi report also devoted considerable space to broader macroeconomic threats that could impact the crypto market. Rising oil prices due to tensions in the Middle East and risks related to the Strait of Hormuz could push up inflation numbers, which could lead the Fed to remain hawkish on interest rate policy. Furthermore, the report suggests that the saturation of speculation in the AI sector, driven by the introduction of cheaper models, could trigger a wave of risk aversion across markets.
*This does not constitute investment advice.
