Has Bitcoin Entered a Bear Market or Is This a Temporary Downturn?

Bitcoin's price has plummeted over 30% from its all-time high of $126,200 to as low as $85,461 in early December 2025, sparking debates about whether this marks the start of a full-blown bear market or a temporary correction. To answer this, we must dissect three critical lenses: long-term holder behavior, macroeconomic indicators, and technical price analysis.

1. Long-Term Holder Behavior: Fatigue or Strategic Accumulation?

Long-term holders (LTHs) are the market's barometer. In Q4 2025, their behavior has been mixed. On-chain data reveals a 300K BTC reduction in LTH supply since July, signaling "quiet distribution" as seasoned investors sell into weakness. This trend aligns with historical patterns where large holders offload during late-cycle volatility. Meanwhile, retail investors have aggressively bottom-fished, with small wallets accumulating during the selloff.

However, institutional buyers remain a stabilizing force. Entities like MicroStrategy (MSTR) and Harvard University (via BlackRock's IBIT ETF) have added BTC during the downturn. The Texas Blockchain Council and New Hampshire's Business Finance Authority also joined the buying spree as reported in the same analysis. This institutional activity contrasts with the caution of corporate holders like Strategy, who might sell if valuation metrics dip below thresholds, potentially deepening the correction according to business insider analysis.

The key takeaway: LTHs are fatigued, but institutional demand suggests a floor could form if macroeconomic conditions stabilize.

2. Macroeconomic Indicators: A Perfect Storm of Risk-Off Sentiment

Bitcoin's decline is not occurring in isolation. A "risk-off" mood has gripped markets, with Bitcoin and high-flying tech stocks moving in tandem due to shared exposure to margin calls and liquidity risks. This correlation underscores Bitcoin's evolving role as a macro asset rather than a speculative corner-case.

The Federal Reserve's policy uncertainty has exacerbated the selloff. Traders are pricing in potential rate cuts, but the path to normalization remains unclear, creating volatility according to business insider analysis. Meanwhile, the Bank of Japan's hints at unwinding the yen carry trade have triggered a global liquidity crunch, further pressuring risk assets according to business insider analysis.

ETF outflows have compounded the pain. In November 2025, spot Bitcoin ETFs saw a record $3.5 billion outflow, the largest monthly exodus on record. Yet, BlackRock's IBIT ETF, which holds 3.9% of global Bitcoin supply, has seen a resurgence in inflows, including $238.4 million in late November as reported in investing analysis. This duality-retail panic vs. institutional resilience-highlights the market's fragility.

3. Technical Price Analysis: Oversold Conditions and a Fragile Equilibrium

Bitcoin's technical picture is a mixed bag. Short-term indicators suggest a potential bounce: the RSI has dipped below 30, historically signaling oversold conditions, while support levels at $84,000 and $82,000 could trigger a rebound as noted in market analysis. However, the monthly RSI remains weak, indicating further downside is possible according to youhodler analysis.

Price action reveals a double-bottom pattern between $99,000 and $104,000, with RSI at 45-a sign of indecision rather than a breakout. Accumulation/distribution metrics, including ETF inflows and a low Net Unrealized Profit (NUP) ratio, suggest a consolidation phase near $100,000 as detailed in investing analysis.

The most critical signal is the weekly SuperTrend indicator, which turned bearish in late 2025-a historical precursor to significant drawdowns as reported in market analysis. If Bitcoin breaks below $75,000, the next target could be $30,000–$35,000 as noted in market analysis.

The Crossroads: Bear Market or Temporary Downturn?

Bitcoin's 30% drop from its peak and the broader crypto market's a $1 trillion cap loss align with bear market definitions. Yet, the market is at a crossroads.

Bullish arguments include:
- Institutional buying by entities like MicroStrategy and Harvard.
- Oversold technical conditions and historical support levels.
- A favorable global liquidity environment and Fed rate-cut expectations.

Bearish risks include:
- LTH selling pressure and potential corporate dumping.
- Macroeconomic uncertainty and ETF outflows.
- A bearish SuperTrend and weak monthly RSI.

Tiger Research's a $200,000 price target for Q4 2025 reflects optimism, but the path to that target will require a resolution of macroeconomic headwinds.

Conclusion: A Bear Market with a Twist

Bitcoin has entered a bear market by traditional metrics, but its trajectory is uniquely shaped by institutional adoption and macroeconomic interplay. While the immediate outlook remains fragile, the market's structure-driven by ETF inflows, strategic accumulation, and historical support levels-suggests this may not be a repeat of 2018 or 2022.

Investors should monitor three key triggers:
1. Federal Reserve policy clarity on rate cuts.
2. Institutional buying momentum via ETFs and corporate treasuries.
3. Breakouts or breakdowns at critical support/resistance levels ($82,000 and $100,000).

For now, Bitcoin is in a consolidation phase-a bear market with the seeds of a potential rebound.