All the bullish stories are still there: why is Bitcoin (BTC) going bad?

BTC, ETH, and SOL are all losing major SMA signals amid a deteriorating structure, even as the bullish catalysts remain ‘on paper’.

But new data suggests crypto assets have held below critical trend lines, and analysts say multiple weekly closes below the 50-week moving average confirm the cycle top.

Vanishing question

Year to date, both gold and the S&P 500 have now outperformed Bitcoin, despite the dozens of seemingly bullish catalysts the market has leaned on through the end of the year. These include interest rate cuts, regulation, stablecoins, tokenization, liquidity, major trade deals, strong GDP prints, Big Tech revenues, the ‘Big Beautiful Bill’ and the expectation of a pro-crypto policy under US President Donald Trump.

Michael Nadeau, the founder of ‘The DeFi Report’, say the bull case still “looks good on paper,” but crypto market participants appear to be stuck in a zone between “hope and disbelief” as sentiment weakens and fundamentals deteriorate. Momentum data shows that BTC, ETH and SOL have all lost their 50, 100 and 200 day SMAs.

The most critical line the analysts are looking at is $102,000, which happens to be Bitcoin’s 50-week moving average. In previous cycles, when BTC posted multiple weekly closes below the 50-week MA, the cycle top had already been reached. Meanwhile, Bitcoin’s longer 200-week moving average stands at $54,700.

Nadeau expects the asset’s price to eventually converge to the 200-week MA (which is still rising) at the bottom of the bear market, if it is indeed heading into a bear market.

BTC, ETH and SOL are now approaching the oversold RSI level (below 30), while the longer tail altcoins are already oversold, which is normally a bull market ‘buy the dip’ signal. But the power situation provides a warning. Bitcoin ETFs have been one of the most successful financial products in history from a net flow and AUM perspective, but since October 10, these vehicles have posted net outflows of $1.4 billion.

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‘Hopium’ on the market

According to the report, the problem is not the size of the outflow, but the absence of inflow, which indicates declining demand. Strategy currently owns over 641,000 BTC. From October 2023 through July 2025, the company purchased 476,000 BTC, which is 1.19x the total amount of BTC mined during that period. But in the past three months, the company only bought 12,200 BTC. It currently owns 12x more BTC than the next largest corporate government bonds, and represents roughly 65% ​​of the BTC government bond market.

With demand for ETFs waning and the biggest buyer pausing, the report focuses on on-chain cohorts. Long-term holders are selling more, indicating the third distribution wave of this cycle. The report says that historically, price increases only begin after long-term distribution owners return to steady accumulation. During previous cycle peaks (2017 and 2021), it took 9.5 to 10 months for the price to bottom out after long-term holders resumed net accumulation.

Those coins are now being transferred to short-term holders, who often capitulate later at lower levels. This is when the long-term holders return. As for sentiment, Nadeau says there is still “buy the dip” because that strategy has worked for almost two years straight.

Nadeau also pointed to a recent essay by macro investor Jordi Visser in which the latter described Bitcoin as being in a “silent IPO” phase and added that the market’s reaction to bullish “therapy-like” stories shows that there is still a huge amount of “hopium” in the system.