Bitcoin and Ethereum weekly bear head established, the market has officially entered a deep bear market from the initial bear phase

From a current technical perspective, the weekly chart patterns of Bitcoin and Ethereum are already quite clear—a classic head and shoulders top is emerging, indicating that a bear head formation has been established. Although some market participants remain bullish, a rational judgment based on both data and technical analysis suggests that the market has shifted from the initial bear phase into a deep bear market.

Weekly Head and Shoulders Top Pattern, Bear Head Characteristics Are Prominent

Examining the weekly charts of BTC and ETH, the head and shoulders top pattern is quite evident. According to the latest data, BTC is currently priced at $68,820, down approximately 45.4% from its all-time high of $126,080; ETH is at $2,050, down about 58.6% from its peak of $4,950. The downward movement of these two major assets confirms the formation of a bear head pattern.

Historical Bottom Reference, ETH May Face Further Decline

Looking at historical data, BTC’s bottom in April was around $74,500, and the current low is close to that level. In comparison, ETH rose from its April bottom of $1,385 to $2,157—relatively resilient—but when compared to the late June bottom of $2,111, the current level still does not fully reflect risk. This suggests ETH may have room for further correction, and in a bear head market, there is no safe “safe haven.”

Halving Cycle Projection, Bear Market Bottom Expected to Be Delayed

Historical patterns indicate that the bottom of a bear market often occurs about a year after the market’s peak in a bull cycle. Based on last October’s peak of $126,080, the final bottom of the bear market might not be reached until around October next year. This provides the market with a sufficiently long downside cycle.

Compared to the previous three halving cycles, Bitcoin’s maximum declines were 86%, 83%, and 77%. However, this time, with large-scale institutional capital entering the market, its resilience is relatively stronger. The maximum decline is expected to narrow to around 60-70%, roughly between $37,000 and $50,000.

Trading Advice: Focus on Shorts, Play Rebounds Cautiously

Understanding the overall bear market outlook is crucial for making sound trading decisions. In the coming six months, a predominantly short-selling strategy should be adopted. When prices rebound near key support levels, it’s appropriate to cautiously bet on a rebound. However, whether holding long positions or bottom-fishing in spot markets, one should avoid over-leverage and stick to the principle of taking profits when the market turns favorable, while managing risk exposure carefully.

In a bear head pattern environment, caution is the best policy.