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Journalist
Tanzeel Akhtar
Journalist
Tanzeel Akhtar
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Bitcoin’s momentum has weakened dramatically this week, breaking below a key support zone that has historically marked the transition from bull markets to bear phases.
After months of consolidation above the six-digit limit, Bitcoin slipped below $100,000, raising fears that a deeper correction could develop if the price recovery fails to materialize soon.
According to CryptoQuant’s Bull Score Index, Market sentiment turned extremely bearish, dropping to zero for the first time since June 2022 – a reading that previously coincided with the start of the last major bear market.
As macro conditions tighten and indicators on the chain soften, traders watch key support levels to determine if this is a temporary correction or the start of a prolonged downtrend.
Bitcoin Falls Below the 365-Day Moving Average
The most alarming technical development is the fall of Bitcoin below its 365-day moving average (MA), currently around $102,000. This long-term indicator has served as a key line of defense throughout the current cycle, as technical and psychological support.
Historically, when Bitcoin decisively broke below its 365-day MA, especially in December 2021 to January 2022, it indicated the formal beginning of a bear market.
Unless Bitcoin regains this level quickly, analysts warn of a potential acceleration in selling pressure, with momentum traders and algorithms likely to amplify negative volatility.
In-chain Data Points to Possible Drop Towards $72K
Traders’ Realized On-Chain Price Bands also indicate an elevated risk of further downside. These bands, which track average purchase prices for short-term holders, indicate a lower band near $100K and a lower band around $72K.
If Bitcoin remains below the $100K threshold for long, loss-making traders could push prices towards that $72K support, marking a 28% drawdown from current levels.
Until this cycle, the lower band acted as dynamic support, cushioning retracements as weaker hands capitulated. A breakdown below this range would mark a structural change in trader behavior, reflecting patterns last seen in 2022.
Network Evaluation Support Almost $91K
Under the network valuation model based on Metcalfe’s law – which says that the value of the network grows proportionally to the square of its user base – Bitcoin’s next key support is around $91,000, corresponding to the 2x Metcalfe-Value band.
Bitcoin traded close to this valuation from November 2024 to May 2025, and a retest could stabilize the market temporarily if investor participation remains firm.
With fundamentals weakening and confidence slipping, Bitcoin is once again testing that “thin red line” between a deep correction and a renewed rally, which echoes the precarious dynamics that defined the bear market of 2022.
