Bitcoin Breaks Below Critical Support Level – CryptoQuant Data Signals Potential Trend Reversal

Bitcoin just sliced through a major price floor. That’s not a dip—it’s a breakdown.

According to on-chain analytics from CryptoQuant, BTC has decisively moved under a key support zone that traders have been watching for weeks. This isn't just another wiggle on the chart; it’s a technical event that historically precedes deeper corrections.

What The Breakdown Really Means

Support levels act like a trampoline—prices bounce off them. When they break, that trampoline turns into a trapdoor. The market’s psychology shifts from ‘buy the dip’ to ‘sell the rip.’ Momentum flips, and algorithms start hunting for the next stop down.

The On-Chain Reality Check

CryptoQuant’s metrics aren’t based on hopium or headlines. They track the actual movement of coins between wallets, exchange inflows, and miner behavior. Right now, that data is flashing warning signs typically associated with distribution, not accumulation.

A Fork In The Road

This puts every crypto investor at a crossroads. Is this a bear trap designed to shake out weak hands before a violent rally? Or is it the start of a deeper, more painful cleanse of speculative excess? Remember, in traditional finance, they call this ‘price discovery’—a polite term for figuring out how little your assets are actually worth.

One thing’s certain: the easy money phase is over. The next move requires conviction, not just a copy-pasted ‘to the moon’ mantra. Buckle up.

TLDR

• Bitcoin may have entered a bear market nearly two months ago based on technical and on-chain indicators.
• CryptoQuant’s bull score index has shown weakness since early November and has not recovered.
• The price of Bitcoin has fallen below its one-year moving average which often signals a market downtrend.
• Bitcoin started 2025 near $93,000 and ended the year below that level after peaking around $126,080 in October.
• The current Bitcoin price is around $88,500 which supports the view of ongoing bearish conditions.
• CryptoQuant estimates a potential market bottom in the $56,000 to $60,000 range based on realized price data.

Bitcoin could have entered a bear market nearly two months ago, according to CryptoQuant’s head of research, Julio Moreno, who cites technical and on-chain indicators that turned bearish in early November and have shown no recovery so far, despite market expectations pointing to continued gains into 2026.

Technical Indicators Suggest Bearish Trend

CryptoQuant’s bull score index has shown persistent weakness since November, with most metrics turning negative and staying low.

This index, which rates Bitcoin’s market strength from 0 to 100, tracks network activity, demand, profitability, and liquidity.

According to Moreno,

“The last confirmation is the price going below its one-year moving average,” a level now clearly breached.

The one-year moving average reflects Bitcoin’s average price over the last 12 months and serves as a key trend indicator.

Falling below that level often signals broader downtrends and has historically aligned with bearish cycles.

Moreno considers this indicator crucial and believes it now confirms Bitcoin’s shift into bearish conditions.

Bitcoin Price Action Aligns With Downtrend Signals

Bitcoin price began 2025 NEAR $93,000, but reversed after peaking around $126,080 in October, ending the year below January’s level.

As of Friday, Bitcoin traded at approximately $88,500, continuing its decline from the earlier highs.

These movements align with bearish indicators and challenge predictions of strong growth in early 2026.

Moreno pointed out that the Bitcoin price falling below its one-year average historically marks the beginning of bear phases.

He added that most supporting on-chain metrics have weakened, showing reduced profitability and slowing demand.

This technical pattern, when combined with fundamental signals, strengthens the argument for a market in retreat.

Market Structure Points to a Softer Landing

Moreno estimates that bitcoin may bottom between $56,000 and $60,000 based on its realized price data.

This metric reflects the average price at which current holders acquired their coins and acts as a market anchor during downturns.

Bitcoin has historically revisited this level during extended bearish periods following large upward deviations in bull markets.

A drop to that range WOULD represent a 55% fall from Bitcoin’s peak, but it remains lighter than past market cycles.

Earlier bear markets saw losses as DEEP as 70% to 80%, often sparked by industry-wide collapses and forced liquidations.

So far, this cycle has seen no large-scale systemic failures, which helps maintain some market stability.

Moreno highlighted the impact of institutional presence, such as ETFs and funds, which tend to hold through downtrends.

He said, “Structurally, we now have more like institutional or ETFs that don’t sell, and also there’s some buying there.”

These participants contribute to steadier market behavior and reduce the chance of panic-driven selling.

The broader base of long-term holders and better infrastructure also appear to support bitcoin price during downturns.

CryptoQuant’s analysis remains focused on on-chain trends and technical levels as Bitcoin continues its current phase.

As of January 2, 2026, Bitcoin trades at $88,500, staying below its yearly average and reinforcing bearish market conditions.