Bitcoin has fallen below a key level that in past cycles served as the lower boundary of a long-term growth corridor. Analysts are divided: some expect a prolonged downturn, while others believe the market is already finding a bottom.
The reason for the debate was several signals at once that had previously appeared exclusively during periods of major turmoil.
Signals of a prolonged correction
Bitcoin has entered a zone that previously emerged during the severe corrections of 2020 and 2023. The same signal has been given again by the MVRV indicator — it compares the market value of coins with the price at which they were bought and shows whether holders are in profit or loss. Past similar periods lasted from 37 to 59 days. The current one has been going for only three days.
An even less optimistic picture is described by a historical model according to which a drawdown of such depth usually takes from a year to a year and a half. The current decline has already lasted 390 days, and bitcoin is still far from its previous high. Even this historical chart is starting to look too optimistic.
An alarming signal has also been recorded by the power-law model: bitcoin has dropped below the lower boundary of the long-term growth corridor. Previously, such breakdowns coincided with serious shocks, including the collapse of the FTX exchange and the crash amid the COVID-19 pandemic. The price is now holding at $74,597, while the lower boundary of the model runs at $76,839.
Arguments of those expecting a reversal
The same signal also has a flip side. Bitcoin spent extremely little time below the model's lower boundary, and such periods were followed by powerful multi-year rallies. According to some traders, the market is forming a local bottom within the next four to five days. The current chart structure does not resemble the formation of a top.
Some analysts have already opened medium-term long positions and are ready to add tenfold-leveraged longs on a decline to $72,000, expecting higher prices by the end of November. Others see the birth of a bull market in what is happening.
In the two previous cycles, the journey from peak to trough took almost exactly a year, and it was preceded by gains of roughly 130x and 20x. In the current cycle, bitcoin has risen only sevenfold, and the top passed without euphoria. The market is now pricing in almost 20% more time to find a bottom, although some traders consider such an explanation unconvincing: the bottom may have formed back at the start of the year, and the current decline is merely a correction within the growth phase.
Holder structure also provides some support: the vast majority of investors have already become disillusioned with all alternatives, and it is becoming increasingly difficult to scare those who have nowhere else to go.
Cryptalist analysis: The market has found itself at a point where historical models give opposite signals: stress-zone indicators point to the risk of a continued correction, while the short-term structure and holder behavior hint at the formation of a local bottom. The key factor remains holding the $72,000–$77,000 range — a breakdown below it will open the way to a deeper drawdown, while a return above the lower boundary of the power-law model will bring the recovery scenario back into focus. Until one of the scenarios is confirmed, volatility will remain elevated.