The Bitcoin market continues to experience a high level of investor uncertainty, as evidenced by the unstable price action over the past week. In the past month alone, the leading cryptocurrency has lost about 14% of its value, reinforcing fears of an impending bear market. Notably, noted market expert Ali Martinez has shared some insight on this speculation, highlighting an important technical development that historically precedes a long-term downtrend.
Bitcoin winter phase only starts when the price drops 730 days SMA – Analyst
In one X message On Friday, Martinez will present an on-chain analysis that identifies a key price zone for determining Bitcoin’s price trajectory amid current market volatility. Using data from Glassnode’s Bitcoin Investor Tool metric, the analyst found that long-term downtrends in Bitcoin often begin once the price falls below the 730-day Simple Moving Average (SMA), a level currently at $82,150. For context, the chart below shows that the 730-day SMA (green), a key long-term indicator, has historically acted as a structural support level during major market cycles. When Bitcoin definitively loses this line, momentum tends to shift, leading to deeper corrections and longer bearish periods as seen between 2015-2016, 2019, and 2022-2023.
However, the chart also offers some bullish insights. Larger cyclical metrics, including the 730-day SMA x 5 band (pink) at $410,771, remain well above current prices, indicating that macro overvaluation is not yet an issue as the leading cryptocurrency is far from being in an overheated zone. According to Ali Martinez, as long as Bitcoin remains above $82,150, the potential for a prolonged downtrend synonymous with a bear market remains minimal, leaving the bull structure intact.
Bitcoin’s weekly net outflows reached $800 million as accumulation increases
In other developments, on-chain analytics company Sentora reports that the Bitcoin market recorded an $805 million increase in weekly net outflows on the exchange, indicating that a significant portion of market investors are unimpressed by the recent price correction. Instead, they are choosing to move a larger portion of their investments from crypto exchanges, indicating their intention to hold on in anticipation of a future price increase. Meanwhile, total Bitcoin network fees reached $1.96 million, representing a 7.69% gain from the previous week and indicating an increase in transactions and network activity during this period. At the time of writing, Bitcoin is trading at $89,693, having dropped 2.71% in the past 24 hours.