Bullish "hope" shattered? Bitcoin drops below $78,000, analysts warn: weekend sell-off is just the beginning

Bitcoin experienced turbulence over the weekend, with prices plunging sharply and breaking below the $78,000 mark, hitting the lowest point since April last year. This decline was mainly driven by profit-taking selling pressure, coinciding with market liquidity drying up, and new buying interest waning, leading to a breakdown in price support.

According to CoinGecko market data, Bitcoin is currently trading at $76,872, representing a 12.2% decline over the past week.

Traders generally believe that the key momentum supporting the market earlier, especially the demand driven by corporate buying, including Strategy (MSTR) continuously adding to their Bitcoin holdings—has now cooled off. As a result, the market structure has become more fragile, making it highly susceptible to chain reactions of selling pressure and forced liquidations in derivatives.

For some market analysts, Bitcoin’s weekend decline was anticipated, merely a continuation of the bearish trend seen over the past few months.

Eric Crown, a former options trader at NYSE Arca, warned as early as late October last year that Bitcoin had entered a “sideways and bearish” phase. The market’s optimism about returning to all-time highs or expecting funds to flow back from precious metals is just self-consolation by the bulls.

“I’ve believed since late October that Bitcoin was in a sideways and downward phase… I don’t think $80,000 is the bottom of this major cycle correction,” Crown emphasized. Recent price fluctuations are just part of a larger-scale correction.

Data from the options market also confirms this strong bearish sentiment. Currently, traders are heavily betting that the price will fall below $75,000, while many are withdrawing their bullish bets on $100,000.

According to Deribit platform data, open interest in put options (bearish options) with a strike price of $75,000 has reached $1.159 billion, approaching the $1.168 billion in call options (bullish options) at the $100,000 strike.

Crown further pointed out several historically accurate technical indicators that signal a deep correction:

• Monthly MACD turning bearish: This indicator experienced a rare downward crossover in November last year, a signal historically associated with prolonged downtrends.
• Weekly EMA moving averages entering bearish territory: The 21-week and 55-week exponential moving averages (EMA) recently formed a bearish alignment, which historically indicates several months of correction risk.
• Candlestick pattern warning: The 2025 yearly chart shows a “Shooting Star” pattern, a typical medium-term trend reversal signal in technical analysis.

Bitcoin’s monthly MACD has shown a downward crossover. (TradingView)

Will Bitcoin fall to $50,000? Even more concerning for bulls is the clear divergence between Bitcoin and traditional markets since October last year: while US stocks and other risk assets remain high, Bitcoin has been declining independently. Crown believes this is a typical end-of-cycle hedging behavior.

“People usually start by selling the most speculative assets,” he explained. Additionally, the market crash in October last year wiped out many highly leveraged futures contracts, causing traders to be hesitant about re-entering at high levels.