All the Bullish Narratives Are Still There: So Why Is Bitcoin (BTC) Breaking Down?

After a devastating downturn this week, Bitcoin climbed above $103,000, posting a acquire of simply over 1% in the previous 24 hours. This has revived hopes of a restoration.

But recent knowledge counsel that the crypto asset went beneath vital trendlines, and analysts say a number of weekly closes below its 50-week transferring common verify the cycle prime.

Vanishing Demand

Year-to-date, each gold and the S&P 500 have now outperformed Bitcoin, regardless of the dozens of seemingly bullish catalysts that the market has been leaning on into year-end. These embrace charge cuts, regulation, stablecoins, tokenization, liquidity, main commerce agreements, sturdy GDP prints, Big Tech earnings, the “Big Beautiful Bill,” and the expectation of pro-crypto coverage below US President Donald Trump.

Michael Nadeau, the founding father of ‘The DeFi Report,’ says the bull case nonetheless appears to be like “good on paper,” however crypto market individuals seem like caught in a zone between “hope and disbelief” as sentiment weakens and fundamentals deteriorate. Momentum knowledge exhibits BTC, ETH, and SOL have all misplaced their 50, 100, and 200-day SMAs.

The most crucial line that the analysts are watching is $102,000, which occurs to be Bitcoin’s 50-week transferring common. In earlier cycles, as soon as BTC posted a number of weekly closes beneath its 50-week MA, the cycle prime was already in. Meanwhile, Bitcoin’s longer 200-week transferring common stands at $54,700.

Nadeau expects the asset’s value to ultimately converge towards that 200-week MA (which remains to be rising) at the backside of the bear market, whether it is certainly heading into one.

BTC, ETH, and SOL at the moment are nearing oversold RSI ranges (beneath 30) whereas longer tail altcoins are already oversold, which is generally a bull-market “purchase the dip” sign. But the circulate scenario is flashing a warning. Bitcoin ETFs have been certainly one of the most profitable monetary merchandise in historical past from a internet flows and AUM perspective, however since October 10, these automobiles have posted $1.4 billion in internet outflows.

‘Hopium’ In The Market

According to the report, the challenge will not be the dimension of outflows, however the absence of inflows, which factors to demand depletion. Strategy at present holds greater than 641,000 BTC. From October 2023 by means of July 2025, the agency bought 476,000 BTC, equal to 1.19x the whole BTC mined in that interval. But in the final three months, the agency purchased solely 12,200 BTC. It at present holds 12x extra BTC than the second-largest company treasury, and represents roughly 65% of the BTC Treasury market.

With ETF demand fading and the largest purchaser pausing, the report turns to on-chain cohorts. Long-term holders are promoting extra, indicating the third distribution wave of this cycle. The report says value expansions traditionally start solely after long-term holders transfer from distribution again to regular accumulation. In earlier cycle peaks (2017 and 2021), it took 9.5-10 months for the value to backside after long-term holders resumed internet accumulation.

Those cash at the moment are being transferred to short-term holders, who typically find yourself capitulating later at decrease ranges. This is when long-term holders return. As far as the sentiment is worried, Nadeau stated that it’s nonetheless anchored to “purchase the dip” as a result of that technique labored for nearly two years straight.

Nadeau additionally pointed to a latest essay from macro investor Jordi Visser whereby the latter described that Bitcoin is in a “silent IPO” part and added that the market’s response to bullish “therapy-style” narratives exhibits that there’s nonetheless an enormous quantity of “hopium” left in the system.

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