Bitcoin bear market or bear trap? Here’s what your “quants” are saying

Bitcoin’s sustained price above $100,000 was thought to signal the arrival of Bitcoin as a mature institutional asset. Rather, the sudden reversal below that threshold spooked traders and reignited fears of another crypto winter.

On November 4th, Bitcoin briefly fell to $99,075, the lowest since May, but has recovered to around $102,437 at the time of writing. Despite the price recovery, BTC is still down about 3% from its intraday high of $104,777. crypto slate data.

This price performance has caused Bitcoin to lag behind U.S. Treasuries for the first time this year, eliminating one of the most popular macro trades in 2025.

But analysts say the move reflects a structural reset rather than a collapse of the system.

Why is Bitcoin price falling?

Long-term holders have played a key role in driving the downtrend in the flagship digital asset by realizing gains at record rates.

Bitcoin analyst James Van Straten noted that the group has sold more than 362,000 BTC since July, equivalent to about 3,100 BTC per day. He said the pace has accelerated over the past three weeks to nearly 9,000 BTC per day.

Another analyst, Johan Bergmann, suggested the total could be even higher. He calculated that the cumulative realized gains for the LTH cohort increased from $600 billion in June to $754 billion as of today.

According to him:

“Assuming they sold at an average price of $110,000, that’s a profit of about $72,000 per coin. That’s $154 billion / $72,000 ≈ 2.1 million coins sold.”

Data from James Check of CheckOnChain further reveals that Bitcoin is currently facing sell-side pressure of $34 billion per month as older coins return to exchanges.

This inflow has largely offset the decline in demand from ETFs and corporate bonds, some of which have shifted focus to stock buybacks rather than new crypto allocations.

At the same time, speculative activity in the market is also declining.

Perpetual futures funding rates have fallen 62% since August, from about $338 million to $127 million per month, reflecting lower leverage, according to Glassnode data.

The company stated:

“This is a clear indication of a macro downtrend in speculative appetite, with traders becoming more reluctant to pay interest to maintain long exposures.”

Meanwhile, enthusiasm is waning as global liquidity tightens.

The prolonged U.S. government shutdown, the longest in history, has tied up about $150 billion in the Treasury Department’s general fund, draining liquidity that would normally circulate through risk assets.

BitMEX co-founder Arthur Hayes noted that since the debt ceiling was raised in July, dollar liquidity has fallen by about 8%, while Bitcoin has fallen by 5%, reinforcing the correlation between the two.

$95,000 becomes market stress point

Due to this wave of selling activity, Check estimates that 57% of all dollars invested in Bitcoin are now lost. His cost-based model values ​​each coin at its last on-chain transaction, reflecting what he calls market recency bias.

He wrote:

“We price every coin when it was last traded on-chain. This helps us interpret sentiment based on recency bias. We don’t think about coins from previous cycles as much as we do about coins we bought three days ago.”

Taking this into account, he noted that about 63% of invested capital has a cost basis of more than $95,000, a level that provides important psychological and structural support.

He also pointed out that unrealized losses totaled nearly $20 billion, or about 3% of the company’s market capitalization. Historically, a bear market begins when unrealized losses exceed 10%.

As a result, he expects sentiment to worsen if prices fall below $95,000. Previous corrections in 2024 and early 2025 stabilized when losses reached 7-8% of market capitalization. If deeper, it could indicate a new bearish phase is underway.

Check notes:

“Obviously no one would make such a decision after prices have already fallen, which is why $95,000 is an important line to hold as prices fall.”

Is this the beginning of a bear market?

Industry analysts remain divided on whether Bitcoin’s recent decline signals the start of a new downtrend or simply a mid-cycle reset.

The check said:

“2025 saw a significant rotation of the coin, with most of it above $95,000. We don’t want the price to fall below $95,000, but we also expect the bulls to put up a tough fight to defend it. Prepare for a bear market, but don’t believe in a catastrophic market.”

However, in a recent note called “Hallelujah,” Hayes said the decline was due to a temporary dollar shortage rather than a structural failure.

He said the massive issuance of Treasury bills sucked liquidity out of money markets. But he believes this dynamic will reverse once policymakers reopen the government and resume expanding balance sheets.

He wrote:

“If current money market conditions continue, the mountain of Treasury debt will grow exponentially, and as the lender of last resort, the SRF balance will have to grow. As the SRF balance increases, the amount of fiat dollars in the world will expand as well. This phenomenon will reignite the Bitcoin bull market.”

Meanwhile, Matt Hogan, chief investment officer at Bitwise Asset Management, said that while he shares Hayes’ long-term optimism, he frames it within Bitcoin’s evolving maturity.

On CNBC, he described the recent economic downturn as a “tale of two markets,” with retail traders capitulating amid leverage drains while institutional investors have quietly increased their exposure.

With this in mind, Hogan emphasized that while BTC’s risk-adjusted outlook remains unparalleled, the days of 100x annual returns are over. He added:

“A 100x return in a single year is unlikely. However, once the distribution stage is completed, there is still significant upside potential…[But we still]believe Bitcoin will reach $1.3 million by 2035, which I personally consider to be conservative.”

At the same time, he believes the days of a 1% BTC allocation are over, as BTC’s lower volatility makes it more attractive to hold.

Hogan concluded:

“As an allocator, my response to this move is not to sell assets, but rather to buy more Bitcoin, as I predict it will be the world’s best-performing large asset over the next decade. In other words, lower volatility means it’s safer to own more.”