After a sharp decline this week, Bitcoin managed to rise above $103,000, reflecting a modest gain of over 1% in the last day. This has rekindled hopes for a market recovery.

However, recent data indicates that Bitcoin has dropped below critical trendlines, prompting analysts to assert that multiple weekly closes beneath its 50-week moving average suggest a potential market peak.

Waning Demand

For 2023, assets like gold and the S&P 500 have outshined Bitcoin, despite numerous bullish events that had supported a hopeful market outlook. These events include interest rate cuts, regulatory changes, stablecoin developments, liquidity provisions, significant trade agreements, robust GDP reports, and optimistic earnings from major tech companies. There is also an anticipation of crypto-friendly policies under US President Donald Trump.

Michael Nadeau, the founder of The DeFi Report, noted that while the bull case appears solid in theory, market participants are increasingly trapped between optimism and skepticism, leading to weakened sentiment and declining fundamentals. Data indicates that Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) have all fallen below their respective 50, 100, and 200-day simple moving averages.

The focus now lies on the $102,000 mark, coinciding with Bitcoin’s 50-week moving average. Historical trends indicate that once Bitcoin exhibits multiple weekly closes below this average, it typically marks the peak of the cycle. Presently, Bitcoin’s longer-term 200-week moving average stands at $54,700.

Nadeau predicts that the price of Bitcoin could gravitate towards this rising 200-week average, especially if the bear market is indeed approaching.

As BTC, ETH, and SOL approach oversold levels (below 30 on the RSI), many alternative cryptocurrencies are already experiencing overselling—a typical signal for buying during bullish phases. Nevertheless, caution prevails as Bitcoin ETFs have reported net outflows of $1.4 billion since October 10, indicating potential liquidity concerns.

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Market Optimism

A report highlights that while outflows are significant, the lack of new inflows indicates stagnating demand. Currently, a strategy holds over 641,000 BTC, having purchased 476,000 BTC from October 2023 until July 2025, which is more than the total Bitcoin mined during this timeframe. In recent months, however, only 12,200 BTC have been acquired.

In an era of declining ETF demand and the primary buyer ceasing purchases, long-term holders are selling more frequently, signaling a third distribution wave. Historical data shows that price increases generally begin when these holders transition from selling back to steady accumulation. Following previous market peaks, it took around 9.5 to 10 months for the price to bottom out after long-term holders resumed accumulating.

Current sentiment remains tethered to a ‘buy the dip’ philosophy, thanks to its effectiveness over the last two years. Nadeau referenced a recent essay by macro investor Jordi Visser, who suggested that Bitcoin is undergoing a ‘silent IPO’ phase, noting the market’s response to optimistic narratives signals prevailing ‘hopium’ in the market.