The cryptocurrency market, a realm notorious for its dramatic swings, may finally be signaling the twilight of its current bear cycle. According to a recent analysis by Compass Point, Bitcoin (BTC) is poised to find its definitive floor between $60,000 and $68,000, barring a significant downturn in the broader U.S. equity markets. This assessment offers a glimmer of hope for investors weary of the prolonged slump, suggesting that the “final innings” of the crypto winter are upon us.
The $60,000-$68,000 Support Zone: A Foundation for Recovery
Analysts Ed Engel and Michael Donovan of Compass Point highlight a critical price range—$60,000 to $68,000—as the likely bottom for Bitcoin. Their base case firmly places this floor around $65,000, a level underpinned by robust support from long-term holders. These seasoned investors, who have held their BTC for six months or more, demonstrate strong buying conviction within this band, a pattern observed in previous market cycles. Approximately 7% of all Bitcoin held by long-term investors was acquired within this crucial $60,000-$68,000 window, signaling a collective belief in its intrinsic value at these levels.
Navigating the ‘Air Pocket’ and ETF Headwinds
Despite the projected bottom, the path to recovery is not without its challenges. Engel and Donovan point to an “air pocket” between $70,000 and $80,000, a zone characterized by minimal structural support. Less than 1% of long-term holder supply was accumulated here, indicating potential vulnerability to selling pressure. Recent market movements underscore this fragility, with Bitcoin dipping below $81,000 to as low as $74,532 over the past weekend.
Adding to the immediate headwinds are the persistent outflows from Bitcoin Exchange-Traded Funds (ETFs). Since mid-January, these funds have recorded a staggering $3 billion in net outflows. With over 50% of ETF assets under management now underwater, analysts caution that elevated outflows could persist, establishing the $81,000-$83,000 range as a formidable overhead resistance level.
The $55,000 Scenario: A ‘Risk-Off’ Event Required
While the $60,000-$68,000 range is expected to hold firm, a more severe downturn to approximately $55,000 remains a possibility, albeit one contingent on extreme market conditions. Such a plunge, analysts suggest, would necessitate a major “risk-off shock” akin to the events of 2022. That period saw Bitcoin’s average cost basis—currently around $55,000—breached only through a confluence of a U.S. equity bear market and several high-profile crypto bankruptcies. Without a similar systemic shock, the likelihood of Bitcoin revisiting these lower depths appears diminished.
As regulatory progress slowly inches forward and funding rates subtly hint at a cyclical bottom, the crypto market stands at a pivotal juncture. While near-term risks persist, the consensus from Compass Point suggests that the worst of the bear market may soon be behind us, with eyes firmly fixed on the $60,000-$68,000 range as the ultimate test of resilience. Investors will be keenly watching for signs of stabilization and a potential reversal, but with a cautious understanding that broader economic shifts could still dictate the market’s immediate trajectory.
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