Bitcoin Bear Market Far From Over as January U.S. CPI Report Set to Decide Its Fate

▲ Bitcoin bear market (downtrend) ©

Bitcoin (BTC) has fallen below $67,000, posting a 5% loss this week alone, and analysts warn that the market has yet to reach a true bottom, leaving room for further sharp declines and heightening investor anxiety.

According to investment media outlet FXStreet on February 13 (local time), demand from institutional investors has noticeably slowed, with four consecutive weeks of outflows from spot Bitcoin exchange-traded funds (ETFs). Based on SoSoValue data, net outflows totaled $375.11 million through Thursday, and this capital flight has been a key factor suppressing price recovery. Nevertheless, Strategy demonstrated long-term confidence by purchasing an additional 1,142 bitcoins at an average price of $76,056.

Macroeconomic indicators are also limiting upside momentum. The stronger-than-expected U.S. January nonfarm payrolls report dampened expectations for an early interest rate cut by the Federal Reserve, boosting the U.S. dollar (USD) and hindering the recovery of risk assets. The market is now closely watching the upcoming January Consumer Price Index (CPI) release, which is expected to amplify Bitcoin’s short-term volatility depending on the outcome.

On-chain analytics firm CryptoQuant noted that despite the recent large-scale losses, the market has not yet entered a structural capitulation phase. On February 5 alone, net realized losses reached $5.4 billion, but cumulative realized losses stand at 300,000 BTC, significantly lower than the 1.1 million BTC recorded at the bottom of the 2022 bear market. In addition, the Market Value to Realized Value (MVRV) ratio has yet to enter the extreme undervaluation zone that historically marked previous market bottoms.

As a result, CryptoQuant analysts estimate the final bottom of this bear market could form near $55,000. Technical indicators support this outlook: the daily Relative Strength Index (RSI) stands at 30, approaching oversold territory, while the Moving Average Convergence Divergence (MACD) shows a bearish crossover, signaling a clear downward trend.

Bitcoin is currently holding precarious support at $65,520, the 78.6% Fibonacci retracement level. If this support is broken, the price could fall to $60,000. Should the market repeat the prolonged bear market pattern of 2021–2022, a worst-case scenario could see Bitcoin plunge to as low as $28,300 by October 2026.

*Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses arising from its use. The content should be interpreted for informational purposes only.*