3 signs Bitcoin is about to enter a bear market (and 1 that could turn things around)

It's been less than two months since Bitcoin shot up to a new all-time high of US$127,000 and yet the largest cryptocurrency now finds itself on the verge of another semi-existential crisis.

Then again, two months is an eternity in crypto. 

Having spent most of 2025 above the once-seen-as-impossible US$100,000 mark, Bitcoin is now at US$92,000 after wallowing around US$86,000, a price not seen since Trump's Liberation Day wreaked havoc across markets.

Compared to almost all other asset classes, crypto has always been prone to extreme reactions in both directions. Macro headwinds that might see equities markets shed a few percent often see Bitcoin and other cryptocurrencies drop 20% or more. 

Conversely, crypto markets can often surge dramatically given the right market conditions. Following the Liberation Day selloff, Bitcoin recovered from a local low of US$76,000 to its October record high, a 67% move. In the same timeframe, the S&P 500 managed a 38% gain from its April bottom.

So while Bitcoin has repeatedly demonstrated its ability to bounce back from 30% drops, the current outlook doesn't augur well for its prospects right now. 

Here are three critical developments suggesting the Bitcoin bull run might be over for now, and one potential saving grace. 

1. A key indicator has flipped red

Because Bitcoin and other cryptocurrencies lack the fundamentals of equities, price action is often driven by macro sentiment and technical analysis. It means technical indicators often play a disproportionate role in guiding the price of Bitcoin.

The monthly MACD (moving average convergence divergence) is one such indicator. It measures two exponential moving averages to determine whether an asset is showing positive or negative momentum, and it has now crossed from bullish-to-bearish.

In every previous Bitcoin bull run, the MACD crossing from green to red indicated that the price had peaked and a prolonged selloff was underway. 

As you can see in the image below, when the MACD indicator turns red (underneath the bottom chart), Bitcoin has entered a bear market. 

While many analysts predicted an end to the roughly four-year boom and bust cycles that have characterised Bitcoin's existence so far, the current cycle looks like it may be following the same pattern.

The October all-time high arrived around 1,064 days after the cyclical bottom in 2022, precisely matching the bottom-to-top timing seen in previous cycles. If history repeats itself this time, it would suggest Bitcoin would be about to enter another bear market.

2. ETF outflows

As with any asset class, Bitcoin's price in the short-term is a simple supply and demand equation. 

After launching in January 2024, spot Bitcoin ETFs have introduced a passive flow of money into Bitcoin, helping push its price higher and sustain it above the US$100,000 mark. 

But since October's all-time high, net flows into the Bitcoin ETFs have turned negative for the first time since early 2025. 

While ETF outflows are not the reason for Bitcoin's recent crash, sustained buying pressure from ETF investors has helped stabilise Bitcoin's price. 

If inflows dry up (and outflows continue), selling from elsewhere will likely see Bitcoin fall further.

3. Strategy's strategic dilemma

Michael Saylor, whose journey from crypto critic to Bitcoin backer is the most extreme example of traditional finance embracing the cryptocurrency, has become the face of Bitcoin evangelism. 

Having turned his moderately successful software company MicroStrategy into the world's first Bitcoin treasury company (and changed its name to Strategy), Saylor has effectively gone all-in on Bitcoin.

Strategy now owns 650,000 Bitcoin, around 3% of the total supply, at a current value of ~US$59.8 billion.

Strategy (NYSE: MSTR) has taken on debt and issued preferred stock in order to buy more Bitcoin, a tactic critics would consider an elaborate house of cards, but one that paid off as Bitcoin's price surged throughout 2024 and 2025. 

But if Strategy struggles to service its debt and dividend obligations, it may be forced to liquidate some of its Bitcoin holdings, which could have a further cascading effect on the price of Bitcoin. 

It has announced a US$1.44 billion reserve to cover dividend payments on its preferred stocks and the interest on its debt. The reserve has been funded by at-the-market sales of MSTR stock and is eventually intended to cover up to 24 months of payments. 

To complicate matters, Strategy's share price has also dropped more than 60% since its all-time high in July, leaving its multiple-to-net-asset-value (mNAV) close to 1x. 

This means its market capitalisation is valued just above the value of its Bitcoin holdings, something predicted by renowned short seller Jim Chanos.  

Current Strategy CEO Phong Le recently admitted that the company could also be forced to sell Bitcoin if its mNAV fell below 1 and it was unable to secure fresh capital elsewhere.

It presents another existential risk to Bitcoin's price at a time when positive catalysts are hard to come by. 

Vanguard riding to the rescue?

One major development that could help reverse Bitcoin's fortunes comes from an unexpected source. Vanguard, the world's second-largest asset manager, with around US$11 trillion in AUM, has reversed its stance on crypto. 

From tomorrow, Vanguard's more than 50 million brokerage customers will be able to invest in crypto ETFs and mutual funds, giving them exposure to Bitcoin, Ethereum, XRP and Solana. 

Of course, it remains to be seen if there's enough demand from Vanguard customers to stop the bleed on Bitcoin, but mainstream accessibility has been one of the key levers of Bitcoin's recent rise and will likely be crucial to its success going forward.