Bitcoin is once again facing notable selling pressure. The market is facing a challenging phase characterized by weakening momentum and cautious investor positioning. Recent price action suggests that bullish belief has weakened. Traders are increasingly alert to liquidity conditions, macro uncertainty and changing market sentiment. While volatility is not unusual at this stage of the cycle, the current environment reflects a market seeking direction rather than maintaining a clear uptrend.
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A recent CryptoQuant report provides additional context through Bitcoin’s Combined Market Index (BCMI), a composite measure that integrates valuation, profitability, spending behavior and sentiment indicators. According to the analysis, the BCMI has fallen to the low range of 0.2, a level that has historically been more associated with early bear market phases – such as those in 2018 and 2022 – than with routine mid-cycle corrections. This shift suggests that a deeper structural adjustment may be underway.
Notably, the BCMI recently hovered around 0.5 in October, a zone typically interpreted as a market equilibrium between bullish and bearish forces. The subsequent drop indicates that this balance has been disturbed. Whether this marks the start of a prolonged bearish phase or a temporary reset will likely depend on future liquidity conditions, investor demand and broader macroeconomic developments.
BCMI’s breakdown points to structural weakness in the Bitcoin market
The CryptoQuant report points to a notable deterioration in Bitcoin’s Combined Market Index (BCMI), indicating a shift from mid-cycle consolidation to a more defensive market regime. According to the analysis, the mid-cycle equilibrium around the 0.5 level did not hold and there was no meaningful recovery from the 0.3 zone.
Instead, the index continued to decline straight towards the low 0.2 range, without the kind of expansionary reset typically seen during healthier correction phases. This pattern differs from recent mid-cycle cool-downs and increasingly resembles a transition to a risk-off-market environment.
Historical comparisons provide additional perspective. Previous cycle bottoms generally occurred when the BCMI reached around 0.10–0.15, particularly in 2019 and again in the bear phase of 2022–2023. Current numbers remain above these capitulation levels, implying that while Bitcoin may already be operating within a bearish structural framework, the conditions for full capitulation have not yet materialized.
Because BCMI aggregates valuation metrics such as MVRV, profitability indicators such as NUPL, spending behavior via SOPR, and broader sentiment measures, the drop to the low 0.2 range reflects shrinking unrealized gains, rising realized losses, deteriorating sentiment, and continued valuation compression. Unless the index stabilizes and regains the 0.4 to 0.5 zone, the likelihood of continued structural weakness remains high.
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Bitcoin Tests Long-Term Support After Weekly Outages
Bitcoin’s weekly chart reflects mounting structural pressure following the recent loss from the $70,000 level, a key psychological and technical threshold that previously acted as support. The price has now retreated towards the mid-$60,000s, putting BTC below shorter-term trend averages and signaling weakening bullish momentum. This shift signals that the market is moving from consolidation to a more defensive phase.
The chart shows a clear sequence of lower highs since the late cycle peak around $120,000. A pattern often associated with corrective or transitional market environments. Recent declines have been accompanied by increased trading volume. Usually indicative of distribution or forced deleveraging rather than gradual profit taking. Such dynamics often increase volatility and complicate ongoing recovery efforts.
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From a structural perspective, the $60,000-$62,000 zone emerges as a crucial support area. This region is in line with previous consolidation phases and high liquidity trading zones that have historically attracted demand. If Bitcoin stays above this level, it could stabilize and potentially provide a basis for sideways consolidation. However, a decisive breakdown would increase the likelihood of deeper retracement scenarios.
Bitcoin’s price remains closely tied to liquidity conditions, institutional flows, and the broader macro sentiment affecting risky assets.
Featured image of ChatGPT, chart from TradingView.com