As Bitcoin ($BTC) finishes another volatile year, crypto analysts are highlighting worrying signals in the cryptocurrency’s momentum indicators. These signals suggest that the first quarter of 2026 could be critical in determining whether the current correction develops into a full-blown bear market. Axel Adler Jr., Bitcoin institutional researcher and certified author of CryptoQuant, shared his insights in a post on X (formerly Twitter) today. His insights are accompanied by detailed analysis and spark debate among investors.
Bitcoin is down 20% in three months, showing negative year-over-year performance. However, the drawdown itself does not define the regime. A judgment will be rendered in the first quarter of 2026.
Which side are you on?
Complete RSI regime analysis in my latest brief 👇 https://t.co/k42K9B3Fpg pic.twitter.com/7JZBiFhsHi
— Axel 💎🙌 Adler Jr. (@AxelAdlerJr) December 25, 2025
Bitcoin RSI approaches long-term crisis level after falling for the first time in three months
Bitcoin has lost about 20% of its value in the past three months, reaching a decline of $21,500, while its year-over-year performance was also negative at -10.5% (about $10,400). The same -20% drawdown could be a healthy correction or the beginning of a serious bear market. Context determines interpretation. Nevertheless, he emphasized that drawdowns are not the only driver of market regimes. Analysts scrutinize technical indicators such as the Relative Strength Index (RSI) to provide context.
This chart shows the trajectory of Bitcoin’s price from 2014 to 2025, showing peaks and troughs consistent with historical market cycles. The monthly RSI is currently at 56.5, below the 12-month SMA of 67.3 for the first time since 2022. More importantly, it is now just two points shy of its four-year SMA of 58.7. This threshold, when breached, often preceded a deeper bearish phase in previous cycles such as 2018 and 2022.
RSI at a crossroads as Bitcoin attempts to form a market base
Adler argues that while double-digit drawdowns are not uncommon for Bitcoin, the RSI’s positioning relative to these long-term averages is what makes the difference between a “healthy correction” and the beginning of a prolonged decline. He said the average price for the past three months ($101,500) and the average price for the full year ($101,800) are about the same, indicating that much of the market weakness has been concentrated in the recent decline and that the market is now stabilizing and establishing a foundation.
Looking ahead, Adler has identified key levels to monitor in the first quarter of 2026. If the RSI remains above 55-58, a recovery may remain possible, while a sustained decline below 55 could signal a more severe downside. For investors, the message is clear. The next few months will tell.
