Oh, darling, it seems our dear Bitcoin is having a bit of a moment. CryptoQuant, the ever-so-diligent crypto research firm, has waved a rather troubling red flag, suggesting that Bitcoin and its merry band of digital assets might be teetering on the edge of yet another prolonged downturn. Quelle surprise!
In a report released on Wednesday-because, of course, bad news always arrives midweek-the firm noted that Bitcoin’s “supply in loss” metric has decided to climb back up. This, my dear, has historically been the harbinger of those oh-so-dreadful bear markets. Mon dieu!
A Bearish Ballet?
According to the ever-observant Woominkyu of CryptoQuant, when the supply held at a loss starts to rise, it’s a sign that market weakness is spreading beyond the short-term traders and creeping into the portfolios of the more resilient long-term holders. How utterly delightful for them!
In previous market cycles-2014, 2018, and 2022, if you’re keeping track-this indicator began its upward trend well before prices hit rock bottom. And, as history would have it, Bitcoin’s price continued to plummet even after this metric turned higher. The true market bottoms, darling, only formed once the supply in loss expanded much further and broader capitulation set in. Quelle horreur!
Presently, CryptoQuant assures us that Bitcoin’s supply in loss remains below the levels typically associated with full market capitulation. But, my dear, the mere change in direction is rather significant. The analysts suggest that the market may be shifting into a bearish structural phase, rather than just enduring a brief correction within an ongoing bull market. How utterly thrilling!
Bitcoin’s recent price action, darling, appears to reflect this uncertainty. The asset is currently trading around $89,700 and has struggled to reclaim the key $90,000 level as support. This follows a steady decline from earlier yearly-highs near $98,000, where upward momentum faded as buying pressure weakened and gains recorded at the start of the year were fully erased. Quelle tragédie!
The Dollar’s Dramatic Role
Despite these cautionary signals, not all analysts believe the outlook is entirely negative. Analysts at Bull Theory have highlighted a potentially bullish catalyst that could emerge in the months ahead, centered on movements in the US dollar. How positively intriguing!
In a recent post on social media platform X (previously Twitter), the firm pointed out that the US Dollar Index is testing the same zone that preceded major Bitcoin bull runs in both 2017 and 2021. According to their analysis, the Dollar Index has broken below a long-term trendline that has held for roughly 16 years and is now hovering around the critical level of 96. Historically, periods when the DXY fell below 96 and remained there coincided with strong Bitcoin rallies. How utterly convenient!
As seen in the chart below, in mid-2017, the index dropped under that level, after which Bitcoin surged nearly eightfold over the following five to six months. A similar pattern played out during the 2020 pandemic era. When a wave of liquidity entered financial markets at the time, the DXY again slipped below 96, and Bitcoin went on to rise roughly seven times over the next seven to eight months. During that same period, Ethereum (ETH) and many altcoins posted gains of tenfold or more. How positively dazzling!
For now, darling, the market sits at a crossroads. On-chain data points to early bear-market dynamics, while macro signals linked to the US dollar offer a counter-narrative that could favor renewed strength. How utterly suspenseful!
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2026-01-29 08:11