Crypto Bear Market Hitting Final Stages: Bitcoin Seeking Bottom Support Around $60K-$68K

The cryptocurrency sector appears to be entering the closing phase of its bearish cycle, with analysts at Compass Point identifying critical support levels that could define the market’s bottom. According to their latest analysis, the crypto bear market is approaching its “final innings,” suggesting that the worst may be behind us—unless broader economic headwinds trigger deeper losses. Bitcoin currently trades around $70.67K, hovering above the projected floor but within a fragile price zone that demands close monitoring.

Compass Point’s Base Case: $60K-$68K Zone Shows Strong Long-Term Holder Conviction

Compass Point analysts Ed Engel and Michael Donovan outlined a detailed framework for where the crypto bear market could stabilize. Their core scenario calls for Bitcoin to establish a floor between $60,000 and $68,000, with particularly strong buying interest concentrated around the $65,000 level. This conclusion stems from analyzing the acquisition patterns of long-term holders—investors who have held Bitcoin for at least six months.

“We see very strong support within this range, with 7% of all Bitcoin owned by long-term holders acquired between $60,000-$68,000,” the analysts noted. This concentration of historical cost basis creates a natural accumulation zone where buyers become increasingly active. The fact that long-term holders have shown conviction at these prices in past cycles suggests that a substantial bid wall would likely emerge if Bitcoin approaches these levels again.

The $60,000-$68,000 support range represents more than just a technical level—it reflects the actual investment thesis and entry points of the market’s most committed participants. When long-term holders see their positions returning to breakeven or approaching profitability, their willingness to add positions typically increases sharply, creating the “very strong support” the Compass Point team identified.

The $70K-$80K Air Pocket: Why This Price Range Lacks Structural Support

One of the more striking findings from Compass Point’s research involves what they call the $70,000-$80,000 “air pocket”—a price zone characterized by minimal structural support and significant vulnerability to further selling. The analysis reveals that less than 1% of long-term holder supply was accumulated within this range, making it essentially devoid of the buy orders that typically absorb selling pressure.

Bitcoin recently dipped below $81,000 before recovering, but this zone represents an overhead resistance level rather than a stable trading environment. According to the analysts, Bitcoin ETFs have experienced roughly $3 billion in net outflows since mid-January, with over 50% of ETF assets now underwater—meaning they’re trading below their entry prices. This dynamic creates persistent redemption pressure and limits upside potential in the near term.

“With over 50% of ETF AUM now underwater, we see risk that outflows remain elevated while $81,000-$83,000 becomes overhead resistance,” Engel and Donovan wrote. This structural weakness in the $70K-$80K zone suggests that Bitcoin could face renewed downward pressure if it revisits these levels, as there would be insufficient buy support to absorb selling volume from disappointed ETF investors.

Breaking Through $60K: What Would Push Bitcoin to Extreme Lows Around $55K

While the $60,000-$68,000 support range represents a logical resting point, a deeper bear market scenario could drive Bitcoin toward $55,000—a level corresponding to the average cost basis across all Bitcoin ever acquired throughout history. However, analysts note this would require more than typical market turbulence.

“Past bear markets have bottomed below the average cost basis for all historical buyers,” according to Compass Point’s research. During the 2022 bear market, reaching such extreme levels required a combination of factors: an equities bear market that forced capitulation selling, multiple high-profile cryptocurrency bankruptcies that shattered confidence, and cascading liquidations that overwhelmed support levels.

The $55,000 scenario remains plausible but would likely demand a genuine “risk-off” shock—perhaps a significant U.S. equity bear market coupled with additional industry failures. Without such extreme conditions, the crypto bear market should find stability well above this level. “Further downside would likely require a U.S. equity bear market,” the analysts emphasized, suggesting that Bitcoin’s near-term fate remains correlated with broader financial system health.

Options Market Signals Accumulation Opportunity: 90-Day Rally Potential After Protective Positioning

Beyond traditional price analysis, options market data reveals intriguing signals about investor positioning and potential reversal dynamics. Bitcoin traders are currently purchasing record quantities of downside protection, evidenced by put/call open interest ratios reaching 0.84—the highest level since June 2021. Additionally, put premiums have climbed to all-time highs relative to spot trading volume, indicating extreme defensiveness.

Interestingly, this type of extreme options positioning has historically preceded significant price advances. VanEck research analyzing the past six years identified that similar extremes in options skew—indicating heavy investor hedging and fear—were followed by average Bitcoin gains of 13% over the subsequent 90 days and 133% over 360 days. These historical patterns suggest the current market psychology, while cautious, may be setting up for a substantial rally once the bear market cycle truly closes.

Supporting this view is the cooling of leveraged speculation and the recent drop in realized volatility from 80 to 50, suggesting that despite spot prices stabilizing, investors remain defensive and positioned for further downside. This contradiction—extreme hedging combined with falling realized volatility—often signals a market approaching a turning point where positions shift from defense to accumulation.

The convergence of these factors—strong support from long-term holders, extreme protective positioning in options markets, and historical patterns showing post-extreme-hedging rallies—suggests that the crypto bear market may indeed be entering its final innings, with $60K-$68K offering the most likely resting point before the cycle turns.