Bitcoin News Today: Bitcoin's Freefall: Bear Market Beginning or 2026 Rebound Setup?

Bitcoin's price continues to languish near six-month lows as investor sentiment spirals toward "extreme fear," with the Crypto Fear and Greed Index hitting a seven-month low of 15. The index, which aggregates volatility, social media hype, and market surveys, has remained in the "extreme fear" zone for over a week, signaling a market on the brink of panic selling. Bitcoin (BTC) recently traded below $96,000, its lowest since May 2025, after dropping 6.4% in 24 hours. Analysts are debating whether this marks the beginning of a prolonged bear market or a buying opportunity ahead of a potential 2026 rebound.

The selloff has been amplified by massive outflows from U.S. spot Bitcoin ETFs, which lost $869.9 million on Thursday-the second-largest daily outflow on record. Grayscale's Bitcoin Mini Trust led the exodus with $318.2 million in withdrawals, while Fidelity's FBTC and BlackRock's IBIT also saw significant exits as reported by The Block. These outflows reflect waning institutional confidence, with some experts attributing the trend to fading hopes of a December Federal Reserve rate cut. The Fed's recent hawkish stance has tightened liquidity across risk assets, with Bitcoin mirroring declines in equities like the Nasdaq.

On-chain data reveals further pressure: Over 815,000 BTC was sold by long-term holders in early November, and exchange reserves have risen after weeks of decline, suggesting more sellers are entering the market. Bitcoin's breakdown below its 200-day moving average-a critical support level-has intensified bearish sentiment. "This liquidity let-down has cascading liquidations meeting a thinning bid stack," said Vincent Liu of Kronos Research, noting that buyers are gradually rebuilding depth around the $92,000–$95,000 range.

Despite the gloom, some analysts argue the market is primed for a rebound. A "bullish falling wedge" pattern has formed as Bitcoin consolidates between $100,000 and $106,000, historically preceding upward breakouts. Ki Young Ju of CryptoQuant noted that the bull market remains intact as long as prices stay above $94,000, the average cost basis for recent investors. Meanwhile, Santiment highlighted that crypto bottoms often form when optimism is scarce, suggesting the current "overwhelmingly negative" sentiment could precede a rally.

The path forward remains murky. While ETF outflows and macroeconomic uncertainty weigh on prices, institutional demand could stabilize if the Fed signals rate cuts or liquidity improves. For now, the market watches closely for a catalyst to reverse the freefall-or confirm a deeper correction.