Compass Point says the crypto market may be approaching the closing phase of the current bear cycle, with bitcoin’s main bottoming zone sitting between $60,000 and $68,000. In the firm’s base case, BTC finds a floor near $65,000. A materially deeper decline, the analysts wrote, would likely need a broader risk-off shock such as a U.S. equity bear market.
In a Monday report, analysts Ed Engel and Michael Donovan said near-term risks still lean to the downside, but they believe the market is moving into the final stretch of the downturn. Their support thesis is tied to long-term holder behavior. They wrote that buyers with holding periods of six months or more have previously shown conviction in the $60,000-$68,000 range, and about 7% of long-term holder supply was acquired there.
ETF outflows leave $81,000 to $83,000 as overhead resistance
Bitcoin recently fell below $81,000 and dropped as low as $74,532 over the weekend. According to the report, that level roughly matches the average cost basis for both bitcoin ETF investors and the broader market. Since Jan. 15, bitcoin ETFs have seen $3 billion in net outflows. With more than 50% of ETF assets under management now underwater, the analysts said the risk of continued outflows remains in place.
That shift in positioning changes the chart structure. The report sees the $81,000 to $83,000 band as overhead resistance rather than support.
The $70,000 to $80,000 range lacks structural support
Compass Point also described the $70,000 to $80,000 area as an “air pocket,” meaning there is limited structural support above $70,000. The reasoning is straightforward: less than 1% of long-term holder supply was acquired in that zone. Without a thicker base of committed holders there, the range may be more vulnerable to additional selling pressure.
If bitcoin breaks below the $60,000-$68,000 support band, the next major level could come in near $55,000. The analysts said that would likely require more extreme conditions. They noted that prior bear market bottoms have fallen below the average cost basis of all historical buyers, which now sits around $55,000. In 2022, bitcoin moved below that level only as an equity bear market and several high-profile crypto bankruptcies hit at the same time.