Bitcoin 30% Correction—Examining the Essence of a Bear Market from Five Perspectives

From November to December 2024, Bitcoin’s price plummeted from $120,000 to $90,000. Facing a 30% decline, the market is dominated by the question, “Has a true bear market begun?” Currently, as of March 2026, BTC price is around $74.29K, close to the initially projected target of $70,000–$80,000. To understand the essence of a bear market, a single indicator is insufficient; a multi-faceted analysis is essential.

Market Sentiment Indicators Suggest Short-Term Rebound Possibility

The Fear & Greed Index is a key gauge quantifying market panic levels. During this period, the index recorded a level of 15 (extreme fear). Historically, such levels often signal buying opportunities.

An extended period of extreme fear lasting a month indicates that market psychology is heavily skewed. However, historically, such situations have favored long-term holders, providing advantageous buying opportunities. In early stages of a bear market, a decline in the fear index is usually temporary, with a rebound likely within 1–2 weeks.

Caution is warranted if the index remains below 20, as further liquidation pressure could accelerate declines.

Technical Signals and Overly Oversold Conditions Diverge

A “death cross” has been confirmed, where the 50-day moving average crosses below the 200-day moving average. This resembles the signal at the start of the 2022 bear market, indicating clear technical downward pressure. The downside target is between $74,000 and $80,000, and current prices are within this range.

Meanwhile, the RSI (14-day) has rapidly fallen from over 70 (overbought) to around 35 (oversold). This volatility reflects exaggerated market reactions. Given the oversold condition, a short-term rebound is highly probable. However, a true trend reversal would require RSI to fall below 30, which has not yet occurred.

In summary, even within a bear market, opportunities for rebounds exist. Trading strategies that leverage 1–2 weeks of volatility can be effective.

Fundamentals Indicate Continued Bullish Momentum

Spot Bitcoin ETF inflows totaled approximately $61.9 billion annually but have turned outflows since Q3. Nonetheless, institutional investors like MicroStrategy continue to buy, suggesting that the overall bear market may be a temporary correction driven by panic selling among retail investors.

From a liquidity perspective, concerns over U.S. government fiscal issues and monetary policy uncertainty are influencing markets. The correlation between Bitcoin and traditional assets has risen to 0.6–0.7, indicating increased influence of macro factors such as interest rates and inflation. While tightening policies are expected to persist through 2025–2026, this does not necessarily mean a prolonged bear market.

Fundamentally, the outlook remains bullish, with short-term outflows viewed as part of a correction. Once monetary easing resumes, capital inflows are likely to accelerate again.

On-Chain Activity Indicates a Resilient Market Structure

On-chain data are crucial for assessing the severity of the bear market. Active addresses have decreased by 20% from peak, and transaction volume has dropped by 30%. At first glance, these are bearish signals.

However, a deeper analysis shows that the proportion of long-term holders (addresses holding for over a year) has increased to 65%. The age distribution of UTXOs (Unspent Transaction Outputs) also shows accumulation trends, indicating no large-scale panic selling.

Most market participants are still holding their positions. In early bear phases, short-term traders tend to sell, while long-term holders provide support. This structure suggests a potential bottom formation.

4-Year Cycle Deformation and Long-Term Outlook

Bitcoin’s traditional 4-year cycle has been altered by ETF entry. Currently, 19 months after the halving, normally new all-time highs would be expected, but ETF absorption has delayed this dynamic. The timing of peak formation is now postponed.

The current situation shares similarities with the late-cycle of 2017, which experienced about 20% correction before a strong rebound. The ongoing bear market can be viewed as part of this temporary correction.

Long-term, a bull market is likely to continue through 2026, with target prices around $200,000. The current bear phase can be seen as a preparatory stage for higher prices.

Multi-Faceted Analysis of Market Outlook

Is the market truly in a full-blown bear market? The answer is “partial bear adjustment.”

Short-term scenario (1–3 months):

• Further correction with a 15% chance of testing $70,000
• Range-bound movement with a 50% chance of oscillating and gradually adjusting
• Rebound initiating, surpassing $100,000 and setting new highs with a 35% chance

All technical, on-chain, and macro indicators point to downward pressure, but the foundation remains stable. Institutional support from entities like MicroStrategy and long-term holders’ backing suggest that the bear is a phase of gradual adjustment rather than the end of a bull market. Market participants should remain calm and observe with a multi-perspective approach.