Bitcoin's Bear Market Dynamics: Contrarian Entry Points in a Maturing Cycle

Bitcoin's bear market, now in its third year (2023–2025), has exposed structural weaknesses in demand and institutionalized selling pressures. Yet, for contrarian investors, the current environment mirrors historical bear market bottoms in 2018 and 2022, offering a rare opportunity to assess value through technical and sentiment indicators. This analysis synthesizes on-chain data, macroeconomic trends, and behavioral patterns to evaluate whether Bitcoin's $87,500 price level in November 2025 represents a strategic entry point.

Structural Weaknesses and Institutional Exhaustion

The bear market's persistence is underscored by declining on-chain demand and exhausted institutional flows. U.S. spot Bitcoin ETFs, once a mechanical bid for price, shifted to net outflows in Q4 2025, reducing upward pressure. Meanwhile, the 365-day moving average-a critical trendline-remains unrecaptured, signaling a lack of accumulation. Funding rates in perpetual futures markets have also collapsed to multi-year lows, reflecting reduced speculative positioning. These metrics align with historical bear market dynamics, where institutional selling and retail panic drive prices to discount their intrinsic value.

Historical Parallels: 2018, 2022, and 2025

Bitcoin's 2018 and 2022 bear markets share structural similarities with the current cycle. In both prior downturns, the Network Value to Transactions ratio spiked to overvaluation levels before correcting. For example, in December 2018, the NVT ratio peaked above 200, while in December 2022, it collapsed to -0.6, signaling undervaluation. As of November 2025, the NVT Golden Cross stands at -1.6, a level historically associated with mean reversion. This suggests Bitcoin's price is trading at a discount to its network fundamentals, a pattern observed at prior cycle troughs.

Technical indicators further reinforce this narrative. The MACD histogram on daily charts has flattened, and the RSI shows hidden bullish divergence as Bitcoin tests key support levels. These patterns, seen in 2018 and 2022, often precede trend reversals. Additionally, the MVRV Z-score has dipped to levels consistent with undervaluation, mirroring 2022's bottom.

Sentiment Extremes and Institutional Accumulation

Investor sentiment, as measured by the Fear and Greed Index, has plunged to "extreme fear" territory in November 2025, with a 13-day streak at 23. This aligns with historical bottoms in 2018 and 2022, where extreme fear preceded sharp rebounds. However, unlike prior cycles, institutional demand has outpaced new production, creating a supply deficit that could act as a floor for prices. ETF holdings, for instance, have not declined by more than 5% despite a 30% drawdown from October 2025 highs, suggesting institutions are accumulating at lower levels.

Contrarian Entry Criteria and Risks

For contrarian investors, three conditions must align to confirm a bottom:
1. NVT Stabilization: The NVT ratio must consolidate near historical undervaluation thresholds (-1.6 in November 2025) without further deterioration.
2. Technical Reclamation: Bitcoin must break above the 365-day moving average and reclaim the 20/50-day EMAs, signaling renewed accumulation.
3. Sentiment Exhaustion: The Fear and Greed Index must remain in extreme fear territory for at least two weeks, ensuring capitulation from speculative retail investors.

However, risks persist. Macro uncertainty-such as delayed U.S. labor data and conflicting Federal Reserve messaging-could prolong the bearish phase. Additionally, large sales of long-held Bitcoin by early holders, observed in November 2025, may exacerbate short-term volatility.

Conclusion: A Maturing Market Awaits

Bitcoin's bear market in 2025 reflects a maturing asset class, where institutional dominance and macroeconomic cycles increasingly dictate price action. While the current $87,500 level is supported by undervaluation metrics and extreme fear, investors must remain cautious. The path to a bull market will require stabilization in ETF flows, a recovery in funding rates, and a breakout above key technical levels. For those willing to navigate the volatility, history suggests this could be a pivotal entry point.