Understanding the essence of the Bitcoin bear market through five analytical frameworks

As of March 2026, Bitcoin has adjusted from a high of $120,000 down to around $69,000, recording a decline of approximately 40%. There is growing concern in the market that this may signal a transition into a full-fledged bear market. However, a comprehensive analysis across multiple frameworks reveals that the current situation is not simply the start of a bearish trend but involves more complex market dynamics.

Market Sentiment and the Depth of the Bear Market — Insights from the Fear & Greed Index

The Fear & Greed Index currently indicates an extreme fear level of 15, with market panic persisting for over a month. Historically, such extreme fear often accompanies sell-offs and tends to reinforce downward pressure.

If the index remains below 20, additional liquidation pressures could emerge. Conversely, past data patterns show that extreme fear often presents buying opportunities. The current panic phase is likely close to a bottom, suggesting a short-term rebound could occur.

From a market psychology perspective, while a correction in a bear market is evident, this is not a structural shift from a bull to a bear market but rather a temporary emotional reaction.

Technical Indicators Indicating Short-Term Downward Structure

The relationship between the 50-day and 200-day moving averages shows a confirmed death cross (short-term MA crossing below long-term MA), similar to the pattern at the start of the 2022 bear market. Technically, this signals a clear bearish trend and suggests a trend reversal is underway.

Technical analysis sets a short-term downside target of $70,000–$80,000. The RSI (14-day) has rapidly fallen from over 70 in the overbought zone to around 35 in the oversold zone, accompanied by high volatility. While the oversold condition hints at a potential rebound, unless it drops below 30, a full reversal remains unlikely in the near term.

Overall, technical indicators point to a bear market correction with a possibility of a short-term rebound within 1–2 weeks.

Fundamentals — Contrasting Institutional and Retail Investor Behavior

Analyzing ETF capital flows shows an inflow of $61.9 billion annually, but since Q3, there has been a shift to outflows. Meanwhile, institutional investors like MicroStrategy continue to buy, creating a contrast with retail investors’ panic selling, which intensifies market selling pressure.

On the macro front, uncertainties are rising due to factors such as the U.S. government shutdown halting Treasury market operations and heated debates over interest rate cuts in December. Bitcoin’s correlation with traditional financial assets has increased to 0.6–0.7, indicating a stronger influence of macro factors like interest rates, inflation, and liquidity. From 2025 to 2026, macro tightening is expected to dominate.

From a fundamental standpoint, the market remains on the bullish trajectory, with long-term bullish sentiment still intact. Large-scale monetary easing has not yet occurred, and the current correction can be viewed as a temporary market reorganization.

On-Chain Data and the Reality — Evidence Against a Full Collapse

On-chain metrics show active addresses have decreased by 20% from their peak, and trading volume has dropped sharply by 30%, indicating typical bear market features.

However, detailed analysis of holding behaviors reveals a different picture. The proportion of long-term holders (addresses holding for over a year) has risen to 65%, and UTXO age distribution still shows accumulation trends. These patterns suggest that panic selling does not dominate the market and that long-term holders are supporting the market’s foundation.

Overall, on-chain data shows a weak trend, but the behavior of long-term holders indicates the market has not entered a complete collapse. Their actions underpin the ongoing bullish base.

The 4-Year Cycle Transformation — The Continued Bull Cycle into 2026

The traditional 4-year cycle theory based on Bitcoin halving has undergone a transformation in 2025, mainly due to the influx of traditional capital via ETFs, which has altered market dynamics.

Since about 19 months after the halving, the pattern suggests that new all-time highs beyond previous peaks are likely. However, the large-scale absorption of supply by ETFs has changed the price formation mechanism, weakening the peak ripple effects seen in previous cycles. Similar movements to the late 2017 cycle are observed, where after a roughly 20% decline, a rebound occurred.

Based on this cycle analysis, the bull market is likely to continue into 2026, with a target price still around $200,000.

Probable Scenarios and Outlook for the Bear Market Correction

Taking a comprehensive view, the short-term (1–3 months) is indeed entering a bear market correction phase. Technical indicators, on-chain data, and macro environment all point to downward pressure, with a target range of $70,000–$80,000 and an estimated 40% probability of reaching that level.

However, it is crucial to recognize that this does not constitute a full transition into a bear market. Factors such as institutional ETF holdings, long-term on-chain holder behavior, and macro liquidity foundations suggest the market remains fundamentally stable, with limited risk of a complete collapse. From a cycle perspective, the bullish trend could extend into 2026.

The following three scenarios are possible: First, a further correction toward $70,000 with a 15% chance; second, a prolonged sideways correction within the current range over time, with a 50% chance; third, a rebound that surpasses previous highs and reaches above $100,000, updating the all-time high, with a 35% chance.

While the surface appearance is of a bear market, underlying conditions and long-term fundamentals suggest that a bullish trend may still be prevailing beneath the surface.