Bitcoin’s price experienced a significant drop over the weekend, falling below $78,000 for the first time since April. This decline is attributed to profit-taking activity, a reduction in market liquidity, and a lack of new buyers. Traders noted that the price rally, which had previously been fueled by corporate buying—most prominently from MicroStrategy’s bitcoin acquisitions—has now lost momentum, creating an environment susceptible to forced selling and liquidation events in the derivatives market.
Market analysts have characterized this price drop as part of a broader bearish trend that has been developing over several months. Eric Crown, a former options trader, has been vocal about his belief that bitcoin is currently in a phase of sideways movement or decline. He categorically disputes the notion that recent price levels indicate a strong support foundation, labeling the optimism surrounding a resurgence to previous highs as “hopium” for bullish investors. Crown has expressed doubts that $80,000 serves as a macro low for bitcoin, suggesting instead that the market is undergoing a corrective phase.
Support for this bearish outlook can be seen in the options market, where traders are increasingly accumulating put options, betting on a further drop in price below $75,000. The total dollar value of active put options contracts at this level has reached approximately $1.159 billion, nearly equaling the $1.168 billion in notional open interest for call options anticipating a surge to $100,000.
Crown has identified several technical indicators that historically precede deeper corrections in the market. One significant signal was the downward crossover of the monthly MACD in November, a rare occurrence that has often heralded prolonged downturns in past cycles. Additionally, the 21-period Exponential Moving Average (EMA) crossing below the 55-period EMA has entered bearish territory, typically leading to extended losses over several months. Furthermore, the yearly chart for 2025 displayed a “shooting star” candlestick pattern, an indication often associated with medium-term reversals.
The current divergence between bitcoin and traditional markets adds to the bearish sentiment. Since October, while equities and other risk assets have remained relatively stable, bitcoin’s value has plummeted—a trend Crown correlates with typical late-cycle risk-off behavior, where investors tend to liquidate their more speculative assets first.
Furthermore, the speculative fallout from October’s market crash has left many traders cautious about re-entering at elevated prices, particularly post the large liquidation of leveraged altcoin positions. Crown mentions that while he does not anticipate an extreme bearish cycle, he does see the potential for bitcoin’s value to drop to the mid-$50,000 to low-$60,000 range. He regards this potential decline as a value-accumulation phase rather than the collapse of the broader cryptocurrency cycle, viewing it as an opportunity to increase long-term holdings.
