Bitcoin's Bear Market: Easing Pressure and Resistance Levels
On-chain data reveals a softening in Bitcoin's bear market conditions, with reduced selling pressure and stabilizing demand, though significant resistance levels remain.
Key Insights
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Insight
Bitcoin's market conditions have shifted from "extra bearish" to "bearish," with the Bull Score index increasing from zero to 30. This signals an uptick in less fearful market sentiment and has coincided with price consolidation between $60k and $74k.
Impact
This easing suggests a short-term stabilization, potentially reducing immediate downside risk and creating conditions for relief rallies within the overall bear market context.
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Insight
Bitcoin spot demand is contracting at a significantly slower pace, with the 30-day contraction improving from 136,000 to 46,000 Bitcoin. Additionally, US investors have stopped selling, as evidenced by the Coinbase premium turning positive.
Impact
Reduced demand contraction and returning US interest indicate a potential bottoming out of selling pressure, which could support price stability or moderate upward movements.
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Insight
Traders' unrealized losses have reached extreme levels, historically acting as a pain index where selling pressure tends to ease due to a lack of incentive to realize further losses.
Impact
This capitulation-like state suggests that a significant portion of potential sellers have either exited or are unwilling to sell, limiting further immediate price declines driven by forced selling.
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Insight
Long-term Bitcoin holders' selling activity has decreased to its lowest 30-day pace since June 2025, further contributing to the overall reduction in market selling pressure.
Impact
The decreased selling by long-term holders, who possess substantial Bitcoin, removes a major source of potential supply, thereby supporting market stability and potentially facilitating upward price movements.
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Insight
Price resistance for Bitcoin is identified in the $76k to $86k range, based on on-chain realized price bands representing average trader purchase prices (1-3 months holding period).
Impact
This defined resistance zone suggests potential ceilings for any relief rally in the bear market, guiding investors to set realistic price targets and anticipate potential reversals at these levels.
Key Quotes
""We are still inside the bear market, but at least for for the for the time being, not not that bearish.""
""Selling pressure is gone, or you know, really minimal levels when there's no more profits to be made, right? It's just losses.""
""When we switch to a bear market is the opposite... now that level turns into resistance, right? So when we get rallies... we see prices going to that level.""
Summary
Bitcoin's Bear Market: A Glimmer of Easing Pressure
For investors closely tracking the volatile cryptocurrency markets, a recent analysis of on-chain data offers a nuanced perspective on Bitcoin's current trajectory. While the market remains entrenched in a bear regime, crucial metrics suggest a significant easing of selling pressure and a potential stabilization, providing a cautious outlook for the short to medium term.
Softening Bearish Sentiment
Recent weeks have seen a notable shift from "extra bearish" to simply "bearish" conditions, as indicated by a proprietary bull score index. This index, which aggregates nine on-chain metrics and one technical signal, has moved from an extreme low of zero to 30 (on a scale of 0-100), coinciding with Bitcoin's consolidation between $60k and $74k. This suggests a reduction in overall market fear and a less aggressive downside.
Demand Dynamics: Slower Contraction and US Re-engagement
Spot demand for Bitcoin, while still contracting, is doing so at a significantly slower pace. The 30-day contraction rate has improved from a severe 136,000 Bitcoin to 46,000 Bitcoin, indicating that the outflow of inventory (Bitcoin unmoved for over a year) is diminishing. This trend is further supported by the Coinbase premium turning positive, signaling that US investors have ceased their aggressive selling and are potentially re-entering the market. Historically, positive Coinbase premiums have often coincided with periods of increased US demand.
Easing Selling Pressure from Holders
Perhaps the most compelling evidence of reduced downside risk comes from the behavior of Bitcoin holders. Traders have reached extreme levels of unrealized losses, a "pain index" that historically precedes a stabilization or relief rally as the incentive to sell at a loss diminishes. Concurrently, long-term holders' selling activity has reached its lowest 30-day pace since June 2025. This combined effect suggests a "capitulation" phase, where the supply-side selling pressure has largely exhausted itself.
Stablecoin Liquidity and Price Resistance
Stablecoin liquidity, specifically USDT market cap growth, has also shown signs of stabilization. While still contracting, the trend indicates a potential shift, which typically correlates with price stabilization. Looking ahead, key price resistance levels are identified between $76k and $86k, based on on-chain realized price bands representing the average purchase price of traders holding Bitcoin for one to three months. These levels are anticipated to act as strong resistance points in the current bear market regime.
Conclusion: Cautious Optimism in a Bear Market Rally
The confluence of these on-chain indicators paints a picture of a bear market rally rather than a full market regime change. While selling pressure has eased and demand contraction has slowed, investors are advised to monitor the Bull Score index for a definitive signal of a bull market – a sustained move above 60-70. For now, market participants should interpret rallies as potential selling opportunities and manage expectations around the identified resistance levels.
Action Items
Monitor the Bull Score index (available on CryptoQuant) for sustained increases above 60-70 as a key indicator for a potential shift from a bear to a bull market regime.
Impact: Early identification of a regime change allows for strategic positioning to capitalize on emerging bullish trends, enhancing investment returns.
Interpret current market rallies, especially if they approach the $76k-$86k resistance zone, with caution, recognizing them as potential bear market relief rallies or selling opportunities rather than immediate signs of a bull run.
Impact: Adopting a cautious approach helps avoid premature bullish positioning, protecting capital from potential reversals typical of bear market rallies and optimizing profit-taking opportunities.
Utilize on-chain metrics, such as apparent demand, Coinbase premium, and unrealized P&L, to gauge shifts in market sentiment and selling pressure, differentiating between genuine demand and temporary bounces.
Impact: Leveraging granular on-chain data provides a deeper understanding of market dynamics, enabling more informed trading and investment decisions beyond mere price action.
Mentioned Companies
CryptoQuant
3.0The analyst works for CryptoQuant and uses their proprietary metrics and platform for all data and analysis, indicating a positive utility and reliability.