Digital asset firm Matrixport believes that Bitcoin’s price trend may be entering a more vulnerable phase. As noted, the OG coin’s recent price swings resemble patterns seen at the beginning of previous bear cycles. While assets remain strong over the long term, short-term momentum is deteriorating. And this is expected to have caught the attention of the participants.
Bitcoin shows early bear signals, but 200-week MA provides support
Matrixport points to Bitcoin’s 30-day rate of change as a major warning sign. Big drops in 30 days of more than 20% were rare during bull markets. When they occurred, buyers quickly stepped in and the price recovered. In contrast, bear markets often exhibit repeated sharp contractions and weaker rebounds.
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According to recent data, the momentum started to fade around the middle of last year. The upward peaks in the 30-day rate of change have become smaller over time. Each rally has shown less follow-through than the previous one.
Inconstancy has also clustered more often in negative areas. These trends indicate a decrease in buying pressure from earlier in the cycle. Even then, short-term moves alone cannot be used to confirm a full-blown bear market.
The OG coin is now moving closer to its 200-week moving average. In the past, this level has acted as strong long-term support. During bear markets, staying well above this average often meant the market overheated. And as the price moved closer, it usually meant a reset in value, not a complete collapse.
Image source: MintGlass
Despite the recent trend, analysts continue to maintain that the exits are not the result of panic selling. In previous cycles, strong price bottoms formed near or slightly below this level. As the price comes closer again, the long-term risk and reward start to look more balanced.
Declining exchange rate balances support bullish long-term outlook
On-chain exchange data adds more context to Bitcoin’s recent price action. BTC balances on exchanges continue to decline. In early bear phases, currency inflows usually rise as holders prepare to sell. Unfortunately, current flows do not show this type of selling pressure.
Image source: MintGlass
Meanwhile, coins continue to leave exchanges and end up in cold storage or long-term wallets. Lower supply on trading platforms reduces direct selling pressure. The absence of a strong influx also indicates that there is no major panic.
At the same time, the number of coins held for 155 days or more continues to increase. In general, the growth in supply from long-term holders during price declines often indicates that coins are moving from short-term traders into stronger hands.
Image source: MintGlass
Similarly, previous cycles showed similar patterns in the middle and later phases of bear markets. Weaker traders sold their positions, while patient investors quietly built up. Steady growth in the supply of long-term holders often preceded major market bottoms. Such purchases later supported a new upward cycle.
According to market commentators, the current setup suggests controlled deleveraging rather than broad distribution. Bear markets rarely move in a straight line. Sharp countertrend rallies can still occur, especially when positioning gets busy.
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