If an upcoming rally does occur, it will be the critical test of whether Bitcoin is in a bear market or not. However, a bullish reversal is highly probable because of how oversold and extended the market already is. If it closes below the weekly Ichimoku Cloud, a flash-crash toward the $25,000 value area is in play. With BitcoinвЂ™s on-chain, fundamental, and technical analysis metrics pointing to extremes, which direction will Bitcoin move? Much will be dependent on how Bitcoin price closes the weekly candlestick. Verdict: Bitcoin is not in a bear market вЂ“ yet That means that Bitcoin has moved over $34,000 lower on this Point and Figure chart without a single reversal column appearing вЂ“ that is an astounding bearish achievement and one for the history books. Spike Patterns are the definition of excess and extremely overdone price action. If there was a visual that screamed вЂOversold,вЂ™ вЂ“ it would be the Spike Pattern now present on this Point and Figure chart.Д«TC/US $2,000/3-box Reversal Point and Figure ChartДЄ Spike Pattern is any column of fifteen or more Xs or Os. Bitcoin has fallen below the Ichimoku Cloud and threatens to closeВ below the weekly Cloud for the first time since the Covid-crash in March 2020.ДЄdditionally, a Spike Pattern is present on BitcoinвЂ™s $2,000/3-box reversal Point and Figure chart.

It is worth noting that the Optex Bands low in July 2021 preceded the rally from $31,000 to nearly $69,000.The Composite Index is trading at the same level as the December 2018 вЂ“ January 2019 lows, the September 2015 lows, and June вЂ“ July 2021 lows.The Relative Strength Index has moved to lows not seen since the Covid-crash lows in March 2020 and January вЂ“ February 2019.ДЇrom a price action perspective, the negative sentiment can also be measured. The Optex Bands oscillator is now in severely oversold territory, a condition seen only three times, first in October 2018 and again as recently as July 2021. On-chain metrics show many reasons to suggest that Bitcoin is either in a bear market or could begin one soon.ДЇrom a technical analysis perspective, BitcoinвЂ™s oscillators on the weekly chart certainly help to confirm the negative sentiment: Is investor sentiment the same or worse than December 2018 or March 2020?ДЄn excellent breakdown of BitcoinвЂ™s current sentiment utilizing detailed on-chain metrics such as Realized-To-Liveliness (RTRO) and Market-Value-To-Realized-Value-Z-Scored (MVRV-Z) was recently completed by FXStreetвЂ™s Sarah Tran. So how is a bear market measured in cryptocurrencies when retracements are so sharp and volatile? The answer is time and sentiment. While the average pullback Bitcoin can experience can range between 30 вЂ“ 40%, flash-crashes and short, sharp corrective moves over 50% occur, albeit rarely. NovemвЂ“ вЂ“ 462 days in length, the max loss was 92.6%.ДecemвЂ“ MaвЂ“ 427 days in length, the max loss was 84%.Д¬ompare and contrast the three primary bear markets against the corrections that Bitcoin faces in an uptrend: JвЂ“ May 25, 2012: 350 days in length, the max loss was 93.8%. For Bitcoin, a 20% drop is not even a normal pullback itвЂ™s a normal swing range.ДЄ look at the past three bear markets show the following results in time and price (weekly charts): Any drop of 20% or more from the all-time high is considered a bear market for equity markets. If the same gauges to measure a bear market in the stock market were used in the cryptocurrency market, bear markets would happen on a nearly bi-weekly basis.

As losses have extended and Bitcoin has entered into the $30,000 zone, concerns regarding Bitcoin being in a bear market have increased.Д«itcoin price action question: what is a bear market for Bitcoin? Bitcoin price has experienced some significant losses over the past few weeks, with a more dramatic drop occurring this week after the Federal ReserveвЂ™s decision was announced.

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