Bitcoin (CRYPTO: BTC) trading action suggests a rebound is becoming increasingly likely, even as the asset tests downside extremes. Data show BTC is about 2.88 standard deviations below its 200-day moving average—the kind of deviation that has not occurred in a decade of data, according to Martin Leinweber of MarketVector Indexes. A dip below $60,000 intensified the narrative that this is macro-driven rather than a breakdown of the technology or the network’s fundamentals, with analysts framing the move as a potential prelude to mean reversion. While official bottoms remain uncertain, the long-term thesis for Bitcoin’s role in diversified portfolios remains intact, keeping attention on what happens next as liquidity and risk sentiment evolve.

Key takeaways

• Bitcoin (BTC) sits about 2.88σ below its 200-day moving average, an extreme not seen in roughly ten years of data.
• BTC plunged more than 22% in a single week, placing the move among the fastest drawn‑down episodes in its history.
• Analysts describe the current bear market as macro-driven rather than a tech failure, with the long‑term thesis for BTC still intact.
• Ethereum (ETH) and Solana (SOL) have underperformed BTC during this episode, underscoring broad risk-off conditions across major crypto assets.
• Despite the drawdown, some observers see signs of mean reversion ahead, though a definitive bottom remains elusive.

Tickers mentioned: $BTC, $ETH, $SOL

Sentiment: Bearish

Price impact: Negative. A steep weekly loss reinforces risk-off sentiment and pressures near-term liquidity dynamics.

Market context: The move aligns with broader risk-off environments where macro factors drive volatility in crypto markets, shaping trading ranges and participant behavior rather than signaling a systemic breakdown of the asset class.

Why it matters

Bitcoin’s recent performance has spotlighted the fragility and resilience of crypto markets at the intersection of macro stress and digital asset hedging. On one hand, the unprecedented distance from the 200-day SMA underscores how stretched sentiment and liquidity can become during risk-off phases. On the other hand, the fact that the long-term investment narrative remains intact—often cited by researchers and institutions—suggests that the drawdown may eventually be absorbed as traders reprice risk rather than reallocate away from the asset class entirely.

Analysts point to the speed and magnitude of the move as a catalyst for renewed interest among long-term holders and “cash-heavy” buyers prepared to accumulate during volatility. In the near term, the market is watching whether the price reverts toward trend lines and whether any technical floor emerges around historically meaningful levels. The divergence between BTC and altcoins like Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL) during this period also matters: a widening dispersion could indicate selective risk appetite among institutional players or hedged traders recalibrating exposure across chains.

Macro factors continue to loom large. When bear markets crest on macro-driven dynamics, the consensus often shifts between “this is a pause before a recovery” and “this is the start of a longer review of risk premia across digital assets.” The sentiment readings have been grim at moments, such as the episode’s rapid liquidation cycles and the perception of liquidity shortages in stressed markets. Yet within this volatility, the potential for mean reversion persists because the observed distances from trend lines are statistically extreme. In the view of Leinweber and others, the dataset suggests that outsized deviations can produce sharp, corrective rebounds when liquidity and risk tolerance normalize.

Historical context remains a persistent theme. The drawdown scenario recalls prior stress events but stokes caution against assuming a bottom has formed. While the macro narrative dominates near-term moves, participants continue to scrutinize on-chain signals, exchange flows, and the behavior of large holders to gauge whether capacity is forming for a technical bounce or if further declines could unfold before any stabilization.

What to watch next

• Monitor Bitcoin’s proximity to the 200-day SMA and any early signs of mean reversion, including turnover in liquidity metrics and order-book dynamics.
• Track hedging and accumulation patterns among large traders and institutions, particularly any shifts in funding rates and open interest on BTC-denominated derivatives.
• Assess sentiment indicators, such as the Crypto Fear & Greed Index, for any uptick from extreme readings as prices stabilize or bounce.
• Compare performance across BTC, ETH, and SOL to determine whether the macro backdrop is driving broad risk-off or if assets begin to decouple in a stabilization phase.

Sources & verification

• Martin Leinweber’s X thread detailing BTC’s distance from the 200-day SMA and the sub-$60,000 dip (via New analysis).
• BTC’s weekly drawdown exceeding 22% and its ranking among the fastest declines in history.
• Crypto Fear & Greed Index reading at 9/100, signaling extreme market pessimism (via Alternative.me).
• Reported dip-buying activity and commentary from traders discussing potential opportunities for cash-rich buyers (via buying the dip).
• On-chain and market observations cited in discussions around BTC’s move and altcoin relative performance (via linked analyses and price pages for ETH and SOL).

Market reaction and key details

Bitcoin (CRYPTO: BTC) has moved into a territory that market technicians label as extraordinarily rare: a sustained deviation from the 200-day moving average that has not appeared in roughly ten years of data. The data show BTC trading below the 200-day SMA by about 2.88 standard deviations, a statistic that Leinweber describes as a once-in-a-decade event. The price fragment below the $60,000 level has arrived amid a weekly slide of more than 22%, a pace that places the move among the most rapid drawdowns in the currency’s history. In practical terms, the slide has undertaken both the breadth of a market-wide risk-off mood and the depth associated with cascading liquidations across leveraged positions.

Despite the severity of the move, the analyst notes that Bitcoin’s long-term investment thesis remains intact. He stresses that the bear market at hand appears macro-driven rather than a sign of systemic weakness in the protocol or in its underlying economic model. In his perspective, the combined signals—distance from the 200-day SMA, an outsized daily drawdown, and the persistence of macro headwinds—point toward a high probability of mean reversion as liquidity conditions normalize and market participants recalibrate risk appetites. This framing resonates with the broader interpretation that the current episode is more about macro dynamics than a fundamental failure of Bitcoin’s supply-demand mechanics.

The broader market also reveals differentiated performance among major crypto assets. Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL) have not kept pace with Bitcoin’s decline, reinforcing the narrative that capital follows risk-off trends with selective dispersions across chains. The distances from trend lines for these assets underscore how volatility has affected the sector as a whole, even as some observers argue that BTC’s unique status as a market anchor can drive sharper moves in its wake. The juxtaposition between BTC’s outsized deviation and altcoins’ responses provides a window into how market participants are weighing potential rebounds versus the risk of renewed downside momentum.

Market participants have also been watching the buy-and-dump cycles that have characterized recent weeks. Several commentators described how large‑volume liquidations have created pockets of opportunity for those with dry powder, especially among hedge funds and major exchange ecosystems. One trader emphasized that the “middle” of 2024’s range could offer attractive entry points for those prepared to accumulate while volatility remains elevated. Yet even as accumulation narratives gain traction, the scale of the current decline and the magnitude of the deviation suggest that any reprieve could be inherited with caution rather than enthusiasm, as investors assess where the next catalyst might come from and whether a longer-term stabilizing phase can emerge from the micro- and macro- forces at play.

As observers parse the data, the emphasis remains on risk management and disciplined positioning. While the macro backdrop remains unsettled—characterized by inflation dynamics, central bank policy expectations, and liquidity considerations—the consensus among several researchers is that Bitcoin’s core narrative persists. The asset’s scarcity, its history of resilience, and the belief that it still acts as a portfolio hedge for some traders anchor a case for eventual recovery, even if the near term remains volatile and uncertain. In short, the market is braced for a potential rebound, but the path there will be shaped by evolving macro signals and the behavior of market participants navigating a complex risk environment.

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Bitcoin (BTC) rebounding is now “highly probable” as BTC price action sets another bearish record.

Key points:

• Bitcoin has never traded so far below its 200-day moving average, data shows.

• BTC price action is due “mean reversion” as a result.

• Analysis describes a “macro-driven” Bitcoin bear market now in progress.

Bitcoin sees one of its fastest price drawdowns

New analysis from Martin Leinweber, director of digital asset research and strategy at European index provider MarketVector Indexes, says Bitcoin’s long-term investment thesis is “intact.”

BTC price action has never strayed so far from its 200-day simple moving average (SMA), and Leinweber said the dip below $60,000 was anything but “normal.”

“Bitcoin is -2.88σ below its 200-day moving average. In 10 years of data, this has literally NEVER happened before. Not during COVID. Not during FTX. Never,” he wrote in an X thread on Friday.

The analysis places this week’s crash among Bitcoin’s 15 fastest, with BTC/USD dropping by more than 22% in a single week, a worse rate than in 98.9% of its history.

“When you’re in the 99th percentile of bad outcomes, mean reversion becomes highly probable,” Leinweber continued.

2.88 standard deviations below the 200-day SMA, however, has never happened before, and sees Bitcoin beat the drawdowns for major altcoins Ether (ETH) and Solana (SOL).

“We’re not at generational lows yet. But we ARE at statistical extremes across multiple indicators,” the analysis said.

Despite that, Leinweber is not in a hurry to predict a long-term BTC price bottom, arguing that the current floor may only be a “local” one.

Zooming out, meanwhile, there remains reason to believe in the Bitcoin bull case.

“Bear market = macro driven, not tech failure. Long-term thesis intact,” the X thread concluded.

Bitcoin dip-buying needs “patience”

Earlier, Cointelegraph reported on the record-breaking nature of recent BTC price losses.

Related: BTC price heads back to 2021: Five things to know in Bitcoin this week

Thursday saw Bitcoin’s first-ever $10,000 red daily candle, with liquidations beating significant bearish events in the past, including the COVID-19 crash and implosion of exchange FTX.

Sentiment dropped to extreme lows, as measured via the Crypto Fear & Greed Index’s 9/100 score.

At the same time, signs that large-volume investors were buying the dip quickly emerged, with the focus on hedge funds and Binance.

Analyzing the wave of liquidations in recent weeks, trader Daan Crypto Trades was among those eyeing a potentially lucrative buying opportunity.

“$BTC Bouncing from the middle of the 2024 range. Price sold off -38% in just a few weeks and a lot of large leveraged positions have been wiped out,” he told X followers. 

“Great time if you are more cash heavy and have the patience to accumulate or profit from the volatility.”