The cryptocurrency market is experiencing a period of deep pessimism. According to my sentiment analysis, the vast majority of market participants do not expect a trend reversal anytime soon and are preparing for further declines in the leading cryptocurrency.
A recent survey, with over 23,000 respondents, showed that 56.2% of them believe the local bottom for Bitcoin has not yet been reached. This is a powerful signal indicating that bearish sentiment is deeply entrenched in investors' minds.
Mining Cost as a Key Support Level
Amid widespread pessimism, however, technical arguments for a potential reversal are emerging. Bitcoin's price has now approached the mining cost zone, which, according to my calculations, ranges from $61,200 to $73,500. Historically, every touch of this level has led to a strong rebound. Weak miners capitulate, supply decreases, and the market forms a long-term bottom.
Institutional Interest Fading
However, the optimistic scenario faces a serious obstacle—a sharp decline in activity in spot Bitcoin ETFs. Trading volumes on these instruments have dropped by 78% from this year's peak levels. The inflow of institutional capital was previously the main driver of growth. Without its resumption, even the historical support at the mining cost level could face a serious test.
U.S. Government Actions Add to Nervousness
An additional source of panic is the transfer of confiscated crypto assets by U.S. authorities to the institutional platform Coinbase Prime. This involves 3,940 BTC ($243.95 million) and 30,014 ETH ($53.09 million).
Social media quickly filled with alarming predictions of an impending sale of government reserves. However, as I believe, a direct sale would violate Donald Trump's March 2025 executive order, which mandates directing seized coins to the Strategic Reserve. The transfer to Coinbase Prime is likely related to custody and consolidation services, not immediate liquidation.
Nevertheless, in conditions of low liquidity and a lack of fresh capital inflows, any such movements are perceived extremely painfully by the market.
My expert assessment: The market is at a critical point. On one hand, fundamental support at the mining cost level is historically strong. On the other, without a resumption of institutional demand and in the absence of positive macroeconomic triggers, the probability of breaking this level and continuing the decline remains high. Investors should prepare for increased volatility and not rule out the scenario of further correction.