Deck: Bitcoin’s sharp drop below $90,000 sparks fear, but onchain data tells a more complex story of accumulation, not capitulation.
Bitcoin’s recent tumble below $90,000 and its first weekly close under the 50-week moving average have retail investors spooked. The fear and greed index has hit depths not seen since the 2022 bear market lows. Yet, behind this wave of panic, onchain fundamentals paint a different picture: exchange reserves at a seven-year low, accumulation signals flashing, and global liquidity near all-time highs. In this article, you will learn why this plunge might be a brutal but temporary shakeout rather than the start of a sustained bear market, what technical and macro indicators suggest, and the key levels and catalysts to watch as we approach 2026. ---
What Just Happened? The Perfect Storm Behind Bitcoin’s Drop
Bitcoin reached an all-time high above $126,000 on October 6th, 2025. Just days later, a flash crash driven by escalating US-China trade tensions triggered massive liquidations, wiping out $19 billion in leveraged crypto positions. The selling intensified, leading Bitcoin to breach the $100,000 level on November 4th for the first time since June. By November 18th, Bitcoin plunged below $90,000 during early Asian trading, marking a 29% drop from its recent peak.
Key catalysts for the crash:
- Federal Reserve hawkishness: Fed officials cooled expectations of December rate cuts, collapsing odds from 95% to under 50%, shaking risk appetite.
- US government shutdown: Creating a liquidity vacuum, this period became one of the driest for fiscal liquidity in years.
- Institutional selling: Spot Bitcoin ETFs saw net outflows of nearly $2.8 billion in November after absorbing significant inflows earlier.
This cascade of events resulted in repeated liquidation waves, each exceeding $1 billion.
Is This a Bear Market? Understanding the Definitions
In traditional finance, a bear market is defined as a drop of 20% or more from a recent peak, typically followed by a multi-month downtrend and fundamental weakness. Since WWII, bear markets in stocks averaged a 30% decline lasting about 13 months.
But crypto is different.
Bitcoin’s inherent volatility means a 20% dip can happen in days and often does — it’s just a correction, not a bear market. A true crypto bear market requires prolonged weakness and structural breakdowns lasting several months.
So:
- By traditional standards, Bitcoin’s 29% decline qualifies as a bear market.
- By crypto’s more battle-tested lens, it remains a severe midcycle correction, likely not the start of a sustained bear market.
Technical Indicators: What the Charts Are Saying
The Breakdown
- 50-Week Exponential Moving Average (EMA): Bitcoin closed below this key support (~$110,000) for the first time in nearly two years — a significant structural breakdown.
- Death Cross: On November 16th, Bitcoin’s 50-day moving average crossed below its 200-day moving average, signaling bearish momentum.
But there’s nuance
- This is the fourth death cross in the current bull cycle. Previous death crosses (September 2023, August 2024, April 2025) marked late-stage corrections near local lows and preceded relief rallies.
- Relative Strength Index (RSI): Sitting at 29, Bitcoin is deeply oversold, historically a signal for short-term relief bounces.
Answer Box: What does a “Death Cross” mean for Bitcoin’s price?
A Death Cross occurs when the 50-day moving average falls below the 200-day moving average, signaling bearish momentum. Though feared, in Bitcoin’s current cycle, prior Death Crosses marked near-term lows and buying opportunities rather than prolonged downtrends.
Onchain Indicators: The Bullish Counternarrative
Despite the price crash…
- Exchange Reserves: Bitcoin held on exchanges dropped to a 7-year low of just 2.38 million BTC. In bear markets, holders flood exchanges to sell — the opposite is happening, indicating strong holder conviction.
- MVRV Ratio: Compares market value to realized value as a profit gauge. Current reading is ~1.8 — neither euphoria nor capitulation, consistent with an accumulation phase.
- Long-term Holder Behavior: Approximately 400,000 BTC distributed over the last month sounds big but is moderate compared to past cycle tops. Over 70% of Bitcoin supply remains securely held by these high conviction investors.
These metrics signal supply scarcity and accumulation amid retail fear.
Macro Picture: Liquidity and Dollar Strength
- US Dollar Index (DXY): Currently weak, trading below its 365-day moving average. A weaker dollar typically boosts risk assets like Bitcoin by increasing market liquidity.
- Global Liquidity (M2 Money Supply): Recently hit record highs. Bitcoin’s price often reacts with a 3-month lag to these liquidity inflows, suggesting fuel is primed for the next rally.
Upcoming Catalysts and Key Levels to Watch
- Federal Reserve FOMC Meeting (Dec 9–10): Market is pricing in a 50/50 chance of a rate cut or pause. A surprise cut could spark renewed buying.
- US Supreme Court Tariffs Decision (Dec/Jan): Could inject volatility.
- Year-end Dynamics: Tax loss harvesting may increase selling pressure but often sets up the classic January effect — fresh capital inflows jumpstarting rallies.
Critical price levels:
| Level | Significance |
|---|---|
| $88,000 - $94,000 | Key support zone; hold to avoid deeper drop |
| $76,000 | April 2025 lows; potential downside if broken |
| $100,000 - $110,000 | Reclaiming above 50-week EMA would restore bull market structure |
Risks — What Could Go Wrong?
- Hawkish Fed: Further interest rate hikes or no cuts could prolong the correction.
- Mining business stress: Firms like Bitfarms pivoting away due to financial pressure could signal systemic weakness.
- Mount Gox wallet dynamics: Large BTC movements ahead of the repayment deadline in Oct 2026 could spook markets.
- Continued institutional outflows: Sustained selling by big players might suppress price recovery.
Understanding these risks will help investors gauge market vulnerability.
Data Callout: Why Exchange Reserves Matter
Bitcoin reserves on exchanges hit a 7-year low at 2.38 million BTC, signaling fewer coins are available for sale. Historically, bear markets see reserves spike as investors dump holdings. This unusual scarcity supports a supply shock scenario that could underlie the next rally.
Actionable Summary for Crypto Investors
- Bitcoin’s sub-$90K plunge signals a correction, but not necessarily a prolonged bear market.
- Technicals offer mixed signals: structural breakdown vs. oversold indicators.
- Onchain metrics reveal strong holder accumulation and severe supply constraint.
- Macro conditions, with weak USD and record liquidity, favor a market rebound.
- Watch $88K–$94K support carefully; reclaiming above $100K would be bullish.
Why It Pays to Stay Informed with Wolfy Wealth PRO
Navigating Bitcoin’s volatility requires more than guesswork. Wolfy Wealth PRO delivers precise analysis of onchain trends, real-time macro insights, and timely alerts on critical market catalysts. Whether you’re trading the next swing or building a portfolio for 2026’s potential upside, get the full playbook and proven risk rules in today’s PRO briefing.
FAQ — People Also Ask
Q1: Has Bitcoin officially entered a bear market?
A1: By traditional finance definitions, yes; by crypto’s more nuanced standards, Bitcoin remains in a midcycle correction approaching bear territory but not necessarily a prolonged bear market.
Q2: What is a "Death Cross" and why does it matter?
A2: It’s when the 50-day moving average crosses below the 200-day moving average, signaling bearish momentum. In Bitcoin’s current cycle, past Death Crosses have coincided with near-term lows, not enduring sell-offs.
Q3: Why are exchange reserves falling if prices are dropping?
A3: Falling exchange reserves mean fewer coins are being deposited to sell, indicating holder confidence and potential supply shortage, which historically supports price stability or recovery.
Q4: How will the Federal Reserve decision impact Bitcoin?
A4: A rate cut could boost risk assets, spurring Bitcoin’s rally; a hold or hike would likely extend downward pressure.
Q5: What levels should I watch to gauge Bitcoin’s next move?
A5: Support at $88K–$94K is critical. A break below could deepen losses. Regaining $100K+ would be the first step in restoring bullish momentum.
Disclaimer: This article is educational and does not constitute financial advice. Cryptocurrencies are volatile and involve risk. Always do your own research and consider risk tolerance before investing.
Bitcoin’s current correction challenges retail investors’ nerves but offers deeper-market signals of resilience. Passing this test could set the stage for an explosive next leg up. When you want sharp, timely analysis and actionable crypto strategies, Wolfy Wealth PRO has you covered.
By Wolfy Wealth - Empowering crypto investors since 2016
Subscribe to Wolfy Wealth PRO
Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
