Bitcoin has fallen sharply over the past 30 days, dropping from a record high of 109k to a low of 77k this week, a level that was last seen in November last year. This significant downturn results in losses of almost 30%. Many investors fear a bear market, characterized by a drop of 20% from a recent high in stock indices. However, a 30% decline in crypto does not automatically signal a bear market, noting the high volatility customary in cryptocurrency pricing, and an even deeper sell-off could still emerge. These corrections are quite normal during Bitcoin’s bull market, having experienced multiple 30%+ declines in previous bull markets before attaining new highs.
Consider the bull run in the 2021 cycle when Bitcoin lost more than 50% of its value in May, only to recover rapidly in the following months, reaching fresh record highs by November.
Furthermore, Bitcoin had a notable decline of 20% from its 2024 record high of 73k at the beginning of that year. This peak was achieved shortly after the introduction of Bitcoin ETFs in January, which propelled the price to 73K in March, only for BTC to drop to 55k by May.
In this article, we’ll delve into Bitcoin’s recent decline, explore macroeconomic factors influencing its price, analyze key on-chain metrics, and discuss what levels traders are currently monitoring. We’ll also examine how multi-asset brokers like PrimeXBT provide tools and market access to capitalize on Bitcoin’s volatility, whether prices are rising or falling.
Macro Factors Affecting BTC & Risk Assets
The recent weakness in Bitcoin aligns with a broader steep decline in the stock market, with the tech-heavy Nasdaq plunging over 10% from its peak into correction territory, while the S&P 500 is down 8.5%. Investors have liquidated risk assets across various sectors, fueled by trade tensions targeting major US trading partners and growing concerns regarding the US economic outlook. Recent data from the prediction platform Polymarket now indicates a 39% probability of a US recession in 2025, up from 23% at the end of February. Moreover, investment banks are upwardly revising the likelihood of a US economic downturn.
Given the close correlation between US stocks and Bitcoin, the cryptocurrency may continue to struggle as long as equity markets face declines. A stabilization of the macro backdrop, a decrease in recession risks, and renewed optimism for Fed rate cuts would be necessary to boost risk sentiment and revive risk assets.
On-Chain Metrics Indicate Caution
On-chain metrics are beginning to reflect caution. According to CryptoQuant, the Bitcoin Bull-Bear Market Cycle Indicator is currently at its most bearish level this cycle, a threshold that has foreshadowed sharp corrections in prior cycles and, at times, the onset of prolonged downturns.
Additionally, whale accumulation, which historically has provided substantial support to BTC prices through significant acquisitions, indicates signs of slowing. Spot BTC ETFs have also shifted to net sellers, highlighting weak institutional demand and exerting further pressure on prices.
What Defines a Bitcoin Bear Market?
Unlike traditional stock indices, where a bear market is defined by losses of 20% or more from a recent high, Bitcoin’s high volatility necessitates different metrics. The 50 Simple Moving Average (SMA) on the weekly chart is a potentially valuable measure to monitor.
If Bitcoin’s price falls below the weekly 50 SMA, it may trigger a bear market designation. Historical data shows that BTC prices fell below this critical support during the bear markets of 2022 and 2018.
The current weekly 50 SMA is sitting at 75k. A weekly close beneath this level could indicate that bears are gaining control.
Why Trade Bitcoin with PrimeXBT?
Whether Bitcoin is undergoing a substantial correction or entering a bear market, increased market volatility can present a wealth of trading opportunities. Significant market movements create an environment ripe for trading potential.
PrimeXBT, a globally regulated multi-asset broker, delivers a comprehensive trading ecosystem where users can buy, sell, and store cryptocurrencies and trade over 100 popular markets including crypto futures and CFDs on crypto, forex, indices, and commodities with both fiat and crypto funds.
With PrimeXBT, users can go long or short in the market, thereby overlapping trading opportunities regardless of market trends. With leverage of up to 200x for crypto, minimal fees, deep liquidity, and attractive spreads, PrimeXBT provides some of the most favorable trading conditions in the field.
To help traders navigate Bitcoin’s volatility, PrimeXBT offers advanced tools such as TradingView-powered charting, risk management features like stop loss and take profit, and a user-friendly trading interface designed for both novices and experts. Furthermore, traders can take advantage of exclusive rewards and bonuses, weekly trading contests, and a commission-based referral program.
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