On-chain analytics firms Glassnode and CryptoQuant have issued stark warnings, indicating Bitcoin has entered a severe bear market phase, with current conditions ranking among the worst in the cryptocurrency's history.
Glassnode's latest report states the market has entered a "deep bear" phase, characterized by a gradual bubble-bursting process rather than a sharp, panic-driven capitulation. The firm's analysis traces the onset to on-chain signals observed around Halloween last year. In the approximately 100 days following those signals, Bitcoin's price plummeted from $110,000 to $60,000, a drop of roughly 45%.
A key pressure point identified is profit-taking by long-term investors. Since November 1st, these holders have realized profits on an additional 318,000 BTC, creating sustained selling pressure in weak market conditions. However, a potential silver lining is that the total assets held by long-term investors have begun increasing again since early December, suggesting a slowdown in the pace of selling.
Glassnode's Market Loss Level metric shows a loss ratio of approximately 24% at the $60,000 price level, which is significantly above the typical bull-bear transition threshold. Historically, extreme panic selling sees loss ratios exceed 50%, indicating the market has not yet reached full capitulation. The price is also failing to stay above the cost basis of major investor cohorts. At $60,000, it sits about 37% below the ~$95,000 cost basis of the top 20% investor group, creating significant psychological pressure reminiscent of May 2022.
Echoing this grim assessment, CryptoQuant Head of Research Julio Moreno provided a comparative analysis. He defines the bear market's start as the moment Bitcoin's price crossed below its 365-day Simple Moving Average (SMA). Currently, the price is 30% below this key long-term average, a deeper decline than seen at similar stages in the 2014 and 2018 bear markets, which were around 20% down. Only the 2022 bear season was more severe at this stage, with Bitcoin down nearly 60% from its 365-day SMA.
Moreno notes this trend is particularly interesting given Bitcoin's perceived maturation as an asset class, yet it still exhibits high volatility at bear market onset. He highlights weakening demand, evidenced by capital constraints and outflows from US-based spot Bitcoin ETFs, as a major issue that must reverse for a market turnaround.
