Bitcoin Establishes a New Hallmark Of Bear Markets

Bitcoin is pushing higher, but the recovery attempt carries a fragile foundation. The crypto king is testing key resistance levels amid growing skepticism from on-chain data.

Several indicators are flashing bearish signals that could undermine the current upward momentum before any meaningful breakout materializes.

Bitcoin Holders Are Underwater

Short-term holder supply in profit has dropped below 50%, a development Glassnode regarded as a “hallmark of bear markets”. This metric reveals that the majority of recent Bitcoin buyers are currently underwater on their positions.

Historically, demand remains suppressed when STH supply in profit falls below this critical threshold.

Risk appetite among short-term investors tends to stay muted until this metric recovers above 50%. Fresh capital inflows are unlikely to accelerate meaningfully while new buyers remain in the red.

A sustained market recovery would be required first to flip this indicator and restore short-term investor confidence in Bitcoin’s upside potential.

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Bitcoin STH Supply In Profit. Source: Glassnode

The Chaikin Money Flow indicator is forming a bearish divergence against Bitcoin’s price. While $BTC prints higher highs, CMF is recording higher lows — a classic signal that selling pressure is building beneath the surface.

This divergence suggests that real capital outflows have not yet been fully reflected in price.

When bearish CMF divergences resolve, they typically do so through price correction rather than indicator recovery. The current setup suggests Bitcoin may be absorbing more selling pressure than its price action indicates.

This hidden pressure could materialize as a notable price drop in the sessions ahead.

Bitcoin CMF. Source: TradingView

$BTC Price Breakout Unlikely

Bitcoin is trading at $70,724, pressing below the $71,529 resistance level that has repeatedly rejected the price over the past six weeks. Each failed attempt at this ceiling has reinforced its significance as a structural barrier. A clean breakout remains elusive despite repeated testing.

Bearish on-chain indicators suggest Bitcoin may face another rejection at $71,529 rather than a clean breakout.

A failure at this level could trigger a correction toward $65,776, mirroring the outcome from the last comparable setup. Selling pressure that has yet to be priced in would accelerate that move.

A shift from selling to accumulation offers the constructive alternative. If investors reverse course and buy aggressively, Bitcoin could clear $71,529 and close above $74,000, invalidating the bearish thesis and opening the path toward the $75,000 milestone.

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