The crypto market faces its steepest weekly correction since the 2016 US election, with Bitcoin slipping modestly. Analysts warn of a prolonged bottom‑shaving phase, urging investors to adopt risk‑mit

Crypto Market Continues to Decline, Sentiment Is Generally Pessimistic

The crypto bull market has not ended; it has simply entered a prolonged bottom‑shaving phase. The overall trend remains unchanged, and investors should prepare position‑management and risk‑mitigation strategies in advance while keeping an eye on macro‑policy developments.

In the past week, the crypto market experienced its largest correction since Donald Trump’s election victory. Although Bitcoin fell by only about 12 %, most altcoins have been halved, and the gains of some coins in the current rally have been completely erased. If the relative optimism on 10 December was taken as a lingering warmth of the bull market, the recent pull‑back has clearly weakened bullish confidence, leading an increasing number of investors to believe that the bull market is over.

I have repeatedly pointed out that a broad‑based rally cannot last forever. Market‑cap growth driven by sentiment will eventually be offset by a sentiment retreat; the faster altcoins rise, the sharper they tend to fall. The market cannot sustain a daily turnover of US $5.4 billion indefinitely, so a period of divergence and consolidation is inevitable. The current wobble looks more like a gear shift within a bull market rather than its termination, based on the three points outlined below. I will analyze them together with the editor of Bitaigen (比特根).

Bitcoin price and sell volume line chart showing trends from September to December

Bitcoin long‑term holders have sold roughly 1 million BTC since September, surpassing the 934 k BTC sold between March and June. The last time a sell‑off of comparable magnitude occurred, Bitcoin’s price range dropped by as much as 33 %; this round has only retraced about 15 %, indicating a stronger market absorption capacity and a markedly higher resilience for Bitcoin.
Historically, before and after the announcement of major positive policies, Bitcoin often experiences a symbolic pull‑back that creates entry opportunities for institutions. For example, after the approval of a Bitcoin ETF, the price fell from US $48,950 to US $38,550, a decline of roughly 21 %. The current dip ahead of a potential Trump administration mirrors this pattern. Although U.S. Bitcoin ETFs now have a larger asset base than gold ETFs, pensions, listed companies, and traditional financial institutions still allocate far less to Bitcoin ETFs than to gold ETFs, so this correction is likely to serve as a chance for institutions to increase their positions.
MSTR still retains an instant‑issuance (ATM) capacity of US $7.65 billion and a convertible note capacity of US $15 billion, giving a potential usable increase of up to US $22.65 billion. This provides the financial firepower needed for a defensive counter‑attack.

Nevertheless, when viewed from both temporal and spatial dimensions, the market correction is not yet complete. If Bitcoin continues to test the lower range bound of US $88,000, most altcoins will likely fail to hold the low point reached on 20 December. Even if Bitcoin completes a bottom‑testing phase around US $88,000, the formation of a new trend will still require a lengthy bottom‑shaving process. Overall, the present decline should not be rushed into as a buying opportunity; the market still needs time to digest the negative factors.

Macro Risks Remain the Key Uncertainty

Rising inflation and higher tariffs are prompting the market to lower expectations for a Federal Reserve rate cut next year; some Wall Street firms even forecast a rate hike starting in the second half of next year.
The U.S. 10‑year Treasury yield continues to climb despite expectations of a Fed easing, already surpassing the federal funds rate and generating a liquidity‑squeeze effect on risk assets.
The surge in Treasury yields is putting additional depreciation pressure on non‑U.S. currencies, accelerating capital outflows and fueling expectations of a Yen rate hike. Although the Bank of Japan has denied any imminent tightening, Nomura predicts a benchmark rate increase in March 2025, with two hikes that would lift the rate to 1 %.

Trend chart of Yen depreciation and US Treasury yield rise

The emergence of macro risks is not wholly negative. David Sacks, the White House’s crypto advisor, argues that a fiat‑system crisis could actually create an opening for Bitcoin to become a mainstream currency.

Operational Guidance

As the Christmas period approaches, trading activity tends to thin out, and temporary low‑volume, low‑price conditions may appear before and after the holidays. For investors preparing to dip‑buy, sector leaders remain relatively stable choices. During the current correction, coins such as SUI, AAVE, and LINK have declined less than the overall altcoin average, exhibiting a “the strong get stronger” pattern.

In this analysis we focus on the deep bottom‑shaving stage of the current crypto market, interpret the logic that the bull market has not ended, and provide position‑management ideas to help readers assess risk and opportunity rationally. In addition, we will combine recent on‑chain data with macro‑policy dynamics to dissect potential market turning points.

BTC Bull‑Market Signal Reversal – Three Data Points Reveal Trend Weakening, How to Pinpoint the “Sell Point”

As a trend‑oriented crypto investor, I always maintain a rational stance. The goal is not only to increase USD value but also to grow the amount of BTC held through trend assessment. Trends and cycles essentially reflect supply‑demand, sentiment, and capital‑seeking‑profit dynamics; on‑chain data analysis is crucial for identifying trend signals and making reasoned decisions.

Trend Review and Current Market Condition

In March 2024, Bitcoin broke US $73,000 to a historic high before entering several months of sideways decline. By October it found support around US $60,000, after which a new rally began. From October to December the market continued a strong upward trajectory, but recent data show signs of weakening momentum.

The “Three Elements” of Trend Weakening

Long‑Term Holders (LTH) Accelerating Distribution – Large‑scale sell‑offs indicate that they view the price as nearing a peak.
Massive Profit Realisation – A high volume of profit‑taking shows that a portion of investors are exiting.
Declining Profit‑Realisation Peaks – Even if the price can still rise, the scale of profit‑taking is on a downward trend.

On‑chain data chart showing three factors

On‑chain metrics reveal that these three elements first aligned in early December, hinting that demand may gradually become insufficient to sustain further price gains.

Key Data Analysis

1. Slowing Capital Inflows

The direction of capital inflows determines price momentum. Similar slow‑downs occurred in May 2021, November 2021, and April 2024, each leading to weakened BTC momentum. In the current cycle, capital inflows have been declining from 24 November to 7 December. If the inflow peak cannot be recovered in the short term, the risk of a correction rises.

2. Shrinking New Demand

New demand is a critical driver of strong price appreciation. At present, the scale of new demand is lower than it was in March 2024 and has only marginally improved on a sentiment basis. Persistent low new demand would push the market into consolidation or even a pull‑back.

3. Shifts in Market Sentiment

The latest data indicate that Asian investors remain the primary engine. U.S. investors showed a brief surge of activity in early December before retreating sharply, while European sentiment stayed relatively flat due to the Christmas holiday.

Sustaining BTC’s upward momentum hinges on whether the U.S. market can reactivate capital inflows and generate fresh demand. If American sentiment does not improve, the probability of a correction will increase further.

Market Strategy and Response

Faced with trend‑weakening signals, I favour staggered profit‑taking rather than waiting for a single “sell point.” In a bull market, trends typically decay gradually rather than ending abruptly. Planning multiple exit nodes and locking in profits in stages is an effective risk‑management approach.

If a new positive catalyst emerges—such as a surge in capital inflows or a revival of new demand—I would pause the profit‑taking plan and wait patiently for fresh sell‑signal confirmation.

Conclusion: Trend weakening does not equal the end of a bull market; it merely signals the need for greater caution. Even when signals appear, sentiment inertia can still push prices slightly higher. Flexible responses and staggered profit‑taking constitute the most viable operational mindset at present.

In the crypto space, the breadth of one’s understanding determines returns. As long as the trading logic is sound, matches risk tolerance, and can be executed, it is worth adhering to. However, remember that data cannot predict the future; stay ready to adjust strategies according to market evolution to remain competitive amid volatility.

Tax Note: Crypto gains may be taxable in your local jurisdiction. Consult a qualified tax professional to understand your obligations.

Ten Signals That a Crypto Bull Market May Be Ending

Massive Short‑Position Influx – A large number of borrowed coins sold short and awaiting cover signals a shift toward pessimism, possibly indicating the bull market’s end.
Shrinking Trading Volume – Lower participation and insufficient liquidity suggest the market may be entering a correction or reversal phase.
Abnormally High Volatility – A move from normal fluctuations to extreme swings raises the risk of flash crashes.
Negative Social‑Media Sentiment – Comments and discussions turn bearish, and sentiment indicators reverse direction.
Weakening Technical Indicators – Key metrics such as MACD, RSI, etc., display clear down‑trend signals.
Large‑Scale Capital Outflows – Risk assets are sold off, pushing prices further down.
Rising Risks in Traditional Markets – Significant pull‑backs in equities and other conventional assets spill over into crypto.
ICO Bubble Manifestation – Exposure of numerous bogus projects and “aircoins” erodes market confidence.
Overextended Bull Duration – When a rally has persisted for an unusually long period, it often approaches its conclusion.
Bull Fatigue – Most long‑position accounts incur losses, confidence wanes, and a correction becomes likely.

The above constitutes a detailed exposition by the Bitaigen (比特根) editorial team on why the crypto bull market has not ended, but the bottom‑shaving process will be lengthy. We hope this analysis proves useful. Happy investing!

Crypto Market Decline Persists as Sentiment Turns Pessimistic