Is Bitcoin Forming a Legitimate Swing Low or Facing a Bearish Fakeout?

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The debate over Bitcoin's near-term trajectory has intensified as the asset navigates a critical juncture in Q4 2025. Technical indicators suggest a deepening bearish bias, with key support levels under pressure and Fibonacci retracement levels broken. However, institutional sentiment and macroeconomic factors hint at a potential consolidation phase rather than a full-blown bear market. This analysis examines the interplay between technical price action and sentiment-driven volatility to assess whether Bitcoin is forming a legitimate swing low or teetering on the edge of a bearish fakeout.

Technical Price Action: A Bearish Narrative Unfolds

Bitcoin's recent price action paints a concerning picture for bulls. The asset has fallen below the 0.50 Fibonacci correction level at $99,600 and is now trading beneath the $93,600 support band, with rising volume amplifying the bearish signal. Analysts warn that the next major support level at $85,000 could become a focal point for further downward momentum, particularly if institutional selling persists.

The breakdown of key moving averages, such as the 50-day EMA, has also raised alarms. A failed rally to the $115,500–$116,000 resistance zone in October 2025 triggered a sharp pullback, reinforcing the likelihood of a retreat toward the $108,000 range, where the 200-day EMA resides. Technical indicators like the RSI (currently at 42) and declining volume suggest weak buying pressure, with traders adopting a wait-and-see approach ahead of a potential directional breakout. If Bitcoin breaks below the $110,000–$108,000 support zone, the $100,000 level could become the next target.

Sentiment-Driven Volatility: Institutional Confidence Amid Bearish Noise

While technicals lean bearish, sentiment analysis reveals a more nuanced picture. According to Q3 2025 spot ETF net inflows, which reached $7.8 billion and Q4's first week alone recorded $3.2 billion in inflows, institutional activity has remained robust. Firms like MicroStrategy (MSTR) have continued strategic accumulation, adding 388 BTC in October 2025-a move interpreted as a vote of confidence in Bitcoin's long-term value.

On-chain metrics further underscore institutional dominance. The MVRV-Z indicator at 2.31 suggests elevated but not extreme valuations, while the October 10 crash-a 14% drop on centralized exchanges-was met with defensive buying from institutions, signaling a healthier market consolidation. This contrasts sharply with the retail-driven collapses of 2021, where speculative demand led to uncontrolled declines.

Macro factors also tilt toward optimism. The Fed's rate cuts and a global M2 money supply of $96 trillion have created a liquidity environment favorable to Bitcoin's valuation. Tiger Research's TVM model, incorporating both fundamental and macro adjustments, projects a $200,000 target for Q4 2025, despite short-term overheating risks.

Synthesis: Swing Low Legitimacy vs. Bearish Fakeout Risks

The tension between technical bearishness and institutional bullishness raises critical questions. A legitimate swing low would require sustained buying pressure at key support levels, such as $85,000, to reverse the downtrend. However, the bearish fakeout risk remains high if institutional inflows stall or if macroeconomic conditions deteriorate.

The October 2025 crash serves as a case study: while the 14% drop initially appeared bearish, institutional defense of the downside suggests a controlled correction rather than a capitulation. This aligns with Tiger Research's thesis that volatility is a precursor to a stronger upward move. Conversely, a breakdown below $100,000 could invalidate the swing low narrative, triggering a deeper correction.

Conclusion

Bitcoin's path forward hinges on the balance between technical exhaustion and institutional resilience. While the short-term technical outlook is bearish, the strength of institutional inflows and macroeconomic tailwinds suggests that the current correction may be a prelude to a larger bullish phase. Investors must monitor key support levels and institutional activity for confirmation of a legitimate swing low. For now, the market remains in a high-stakes consolidation phase, where patience and risk management will be paramount.