Bitcoin’s recent plunge has triggered a significant technical indicator known as a “death cross,” where the 50-day moving average crosses below the 200-day moving average — a pattern traditionally viewed as a bearish signal. This crossover occurred as Bitcoin dipped below both averages, raising questions about whether the market is entering a prolonged downtrend or simply repeating short-term volatility seen in previous cycles.
At the time of writing, Bitcoin (BTC) trades around $91,000, reflecting a 5% decline over the past 24 hours. This drop places the asset below key support levels, prompting speculation about whether this is a temporary correction or the beginning of a deeper retracement.
Technical analyst Ali Martinez highlights that in the past year, each death cross has eventually reversed course, leading to renewed bullish momentum. However, he also notes that the current decline mirrors patterns observed in 2022, when a similar setup led to a prolonged bearish phase. The speed and structure of the present decline closely resemble that historical precedent, adding to market caution.
Bitcoin is now trading below its Market Value to Realized Value (MVRV) mean — a key valuation metric that compares the asset’s current market price with its average acquisition cost. Historically, a drop beneath this threshold has signaled undervaluation, often preceding recovery phases. Nevertheless, the current setup suggests Bitcoin may still face further downward pressure before finding a bottom.
Martinez also identified three critical support zones that could come into play if bearish momentum persists. These levels align with points of historical deviation and past realized price lows, where Bitcoin previously consolidated before reversing.
Examining broader market cycles, Martinez draws parallels to Bitcoin’s 2017 and 2021 peaks, followed by bear markets lasting approximately 364 days and resulting in drawdowns of 84% and 77%, respectively. If a similar pattern unfolds and the current cycle peaked in October 2025, a potential market bottom might not occur until October 2026 — a sobering projection for bulls.
Adding to the concerns, on-chain data reveals an uptick in Bitcoin being transferred to exchanges, a trend often associated with increasing sell pressure. This movement suggests that some holders may be preparing to liquidate, either to preserve capital or reallocate assets amid uncertainty.
Despite the grim technical setup, not all analysts agree on a bearish outlook. Market commentator Egrag Crypto offers a more optimistic view, warning against over-reliance on traditional indicators like moving averages, which may have lost reliability in the current market environment. According to Egrag, Bitcoin remains structurally robust as long as it holds above the 21-week exponential moving average (EMA). He interprets the recent price dip as a healthy retest of long-term support, not a breakdown.
Egrag also points to the potential for a rebound toward the 1.618 Fibonacci extension — a level often used by traders to forecast bullish continuation. If the market respects this retracement zone, it could signal the beginning of a new upward leg in the current cycle.
In addition to technical indicators, macroeconomic forces continue to shape Bitcoin’s trajectory. With inflation data, interest rate policies, and geopolitical tensions influencing investor sentiment, digital assets remain vulnerable to broader financial trends. A shift in the Federal Reserve’s stance, for instance, could either reinvigorate risk appetite or deepen market caution.
Institutional involvement also plays a growing role in Bitcoin price dynamics. Increased activity from large asset managers and the launch of regulated crypto investment products have introduced more complexity into market patterns. While institutional interest lends legitimacy to the asset class, it also brings with it the volatility associated with high-frequency trading and leveraged positions.
Furthermore, Bitcoin mining costs, energy consumption models, and miner profitability have become crucial elements in assessing fair value. Some analysts note that the current price has dipped below estimated energy cost models, which historically acted as a floor, suggesting a potentially oversold condition.
Another factor to watch is the behavior of long-term holders — wallets that have held Bitcoin for over a year. Historically, these entities tend to accumulate during downturns and sell near market tops. Recent data shows that long-term holders are largely unmoved, continuing to hold despite price weakness, which could indicate underlying confidence in Bitcoin’s long-term prospects.
As the market navigates this uncertain phase, traders and investors alike are closely monitoring upcoming catalysts — including regulatory developments, ETF approvals, and halving-related supply dynamics. With the next Bitcoin halving expected in 2024, some analysts argue that the current volatility could be part of a broader accumulation phase ahead of a future bull run.
In summary, while the appearance of a death cross raises red flags, it does not guarantee a prolonged bear market. Historical precedents offer mixed signals: some death crosses have preceded recoveries, while others have been harbingers of deeper declines. The market’s next move will likely depend on a combination of technical resilience, macroeconomic factors, and on-chain signals — all of which remain in flux. Investors should remain cautious but not necessarily bearish, as the unfolding weeks will be critical in determining Bitcoin’s next major direction.