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Key Takeaways
What does crypto winter mean for the average market participant?
It means that investor confidence is declining, which is reflected in reduced market confidence and steady price declines across the market.
Could experts be wrong about the coming bear market?
It’s possible, but as things stand now, it’s unlikely. Bitcoin bulls will have to perform heroic deeds to save the market over the next 2-3 weeks to prove the experts wrong.
Is crypto winter around the corner? Last week alone, $1.227 billion worth of positions in the crypto futures market were liquidated.
These figures accounted for just the top two assets, Bitcoin [BTC] and ether [ETH].
Glassnode data showed that ZCash [ZEC] had the third highest liquidations last week, at $193.77 million.
The graph above shows that the Open interest behind Bitcoin has fallen from $90.24 billion on October 10 to $66.54 billion at the time of writing.
In one message on Xcrypto analyst Maartun noted that BTC exchange-traded funds (ETFs) are down $3.29 billion from their peaks. This was their second highest recording since launch.
What to expect in a crypto winter
Bitcoin fell below $90,000 in recent hours, marking the lowest level in almost seven months. In addition to declining Open Interest, spot trading volumes for crypto assets are also expected to decline as a bear market appears to be on the horizon.
A decline in ETF volume and investor interest will be another sign of a bear market.
Source: TOTAL on TradingView
The total crypto market cap fell to $3.04 trillion, retesting a trendline support dating back to October 2023.
A 28.9% drop in crypto market cap in 45 days was alarming and another ominous sign of a potential crypto winter.
The altcoin market cap (excluding Ethereum) also barely reached a new high this cycle. It remained at $1.13 trilliona highlight of 2021. Altcoin performance during this cycle helped explain the miserable sentiment surrounding crypto.
Bitcoins next movement, and the potential start of a bear market
Benjamin Cows explained the importance of the 200-day moving average for Bitcoin.
Unless this is recovered quickly, a bear market will most likely emerge. In this bearish scenario, a retest of the 200DMA would form the upper time frame lower high, confirming the crypto winter.
At the time of writing, the 200DMA for BTC was $110.4k. This “macro lower high” would eventually lead to BTC visits $60k-$70k in 2026, the 200-week moving average.
Contrary to these bearish expectations, Joao Wedsonfounder and CEO of crypto analytics firm Alpharactal, posted that Alpha signals still did not show an all-time high for this cycle.
To reach a new high, an explosive bullish move would need to take place over the next two to three weeks, Wedson warned.
As even the experts agreed, no one has one crystal ball. It is almost impossible to predict the next step, but it is possible to prepare for the outcomes based on what has happened in previous cycles.
We are not definitively in a bear market, but winter was certainly approaching in crypto city. The next three weeks, and the potential rise to $110,000, are developments that investors will be paying attention to.