Bitcoin Enters Most Bearish Phase in Two Years

According to CryptoQuant data, Bitcoin’s descent from its October 6 peak above $126,000 to $83,790 represents one of the most severe corrections in recent memory. The analytics firm’s Bull Score Index plummeted to just 20 out of 100 last week, indicating dramatically weakened market conditions. This bearish shift has been driven by three key factors: weak spot buying, negative price momentum, and a concerning slowdown in stablecoin liquidity that typically fuels crypto market rallies.

Perhaps most significantly, Bitcoin closed below its 365-day moving average for the first time in the current cycle that began in January 2023. This long-term trendline had successfully supported prices during earlier pullbacks, making its breach a critical technical development. CryptoQuant analysts view this breakdown as evidence that the current market environment is clearly more bearish than prior corrections experienced over the past two years.

The institutional landscape that previously supported Bitcoin prices has undergone a dramatic transformation. Corporate treasuries that once provided consistent buying pressure have seen their market values plummet by 70% to over 90% in recent months, severely limiting their ability to issue shares and purchase additional Bitcoin. Even Michael Saylor’s MicroStrategy, a bellwether for corporate Bitcoin adoption, has slowed its aggressive accumulation strategy despite acquiring 8,178 BTC earlier this week.

Exchange-traded fund flows have turned decisively negative, with outflows totaling nearly $3 billion so far this month. This reversal from previous institutional enthusiasm creates a dangerous feedback loop: as ETF outflows continue, some institutions may be forced to sell spot Bitcoin holdings if spread trades are unwound, creating additional downward pressure on prices. The weakening of these traditional support pillars represents a fundamental shift in market structure.

Despite the overwhelmingly bearish sentiment, technical indicators provide some mixed signals for potential buyers. Glassnode data shows Bitcoin’s Mayer Multiple moving toward the bottom of its long-term range, which historically signals value-driven phases where buyers typically re-enter the market. Additionally, oversold readings on daily and weekly Relative Strength Index (RSI) metrics suggest conditions are ripe for at least a short-term bounce.

Some analysts anticipate potential tests above $100,000 if buying returns, though CryptoQuant identifies resistance near $102,600 as particularly heavy. The support band between $90,000 and $92,000 will be closely watched as a critical level that could determine the market’s next major move. Historical patterns show that Bitcoin has frequently produced rallies of 40% to 50% within broader downtrends, suggesting rapid reversals remain possible even in this bearish environment.

The current downturn gained momentum on October 10 when a large-scale leverage flush-out forced numerous positions to close simultaneously. Market makers responded by reducing liquidity, which intensified selling pressure across exchanges. The situation worsened when a software fault involving the Athena USDE stablecoin on Binance briefly pushed its peg to $0.65, triggering automated liquidations across multiple platforms and accelerating market losses.

Macroeconomic concerns including tighter liquidity conditions and political uncertainty have added further pressure, driving more traders to exit positions. The catalysts that fueled previous rallies—such as Donald Trump’s 2024 election victory pushing Bitcoin above $100,000 and the 2025 corporate treasury buying wave that lifted prices above $120,000—have largely played out according to CryptoQuant analysis. With these historical drivers exhausted and potentially priced in, the market awaits new triggers to reverse the current bearish trajectory.