Key Takeaways

What does crypto winter mean for the average market participant?

It means investor confidence is shrinking, and is reflected in reduced market confidence and steady price declines across the market.

Could experts be wrong about the incoming bear market?

It is possible, but as things stand, unlikely. Bitcoin bulls will need to perform heroics to rescue the market in the next 2-3 weeks, to prove the experts wrong.

Is crypto winter upon us? Over the past week alone, $1.227 billion worth of positions in the crypto futures market have been liquidated.

These figures accounted for just the two leading assets, Bitcoin [BTC] and Ethereum [ETH].

Glassnode data showed that ZCash [ZEC] had the third-highest liquidations over the past week, at $193.77 million.

The chart above shows that the Open Interest behind Bitcoin has fallen from $90.24 billion on the 10th of October to $66.54 billion at the time of writing.

In a post on X, crypto analyst Maartun observed that the BTC exchange-traded funds (ETFs) were down $3.29 billion from their peaks. This was their second-highest drawdown since launch.

What to expect in a crypto winter

Bitcoin fell below $90k in recent hours, marking its lowest level in nearly seven months. Alongside the declining Open Interest, spot trading volumes for crypto assets are also expected to fall as a bear market seems to be upon us.

A decline in ETF volume and investor interest will be another sign of a bear market.

The total crypto market capitalization fell to $3.04 trillion, a retest of a trendline support that stretched back to October 2023.

A 28.9% drop in the crypto market cap in 45 days was alarming and another ominous sign of a potential crypto winter.

The altcoin market cap (excluding Ethereum) barely made a new high this cycle, either. It stalled at $1.13 trillion, a high from 2021. The altcoin performance this cycle helped explain the miserable sentiment around crypto.

 Bitcoin’s next move, and the potential start of a bear market

Benjamin Cowen explained the importance of the 200-day Moving Average for Bitcoin.

Unless it is reclaimed quickly, a bear market would be highly likely to commence. In this bearish scenario, a retest of the 200DMA would form the higher timeframe lower high, a confirmation of crypto winter.

At the time of writing, the 200DMA for BTC was at $110.4k. This “macro lower high” would eventually lead to BTC visiting $60k-$70k in 2026, the 200-week moving average.

In contrast to these bearish expectations, Joao Wedson, founder and CEO of crypto analytics firm Alphractal, posted that some Alpha signals still didn’t show that an all-time high for this cycle has been achieved.

To achieve a new high, the next 2-3 weeks would need to see an explosive bullish move, warned Wedson.

As even the experts agreed, no one has a crystal ball. It is almost impossible to predict the next move, but it is possible to prepare for outcomes based on what happened in previous cycles.

We are not definitively in a bear market, but winter was certainly advancing on crypto town. The next three weeks, and the potential bounce toward $110k, are developments investors will watch out for.