Bitcoin Bear Market in 'Final Innings,' Analysts Say at $65K

Bitcoin's painful downturn may be approaching its conclusion, according to institutional analysts at Compass Point who say the cryptocurrency is likely to find a bottom between $60,000 and $68,000—with their base case targeting approximately $65,000.

The Tuesday analysis offers a glimmer of hope for battered crypto investors. Following weekend lows that tested $74,662 and triggered record liquidations, the cryptocurrency has recovered modestly to trade around $78,748.

"Final Innings" of the Bear Market

In a research note published Monday, Compass Point analysts Ed Engel and Michael Donovan wrote that "while near-term risk remains skewed to the downside, we believe we're approaching the final innings of the crypto bear market."

The baseball metaphor suggests Bitcoin is in the late stages of its correction, though not necessarily at the very bottom yet. Their forecast is based on analysis of long-term holder behavior, ETF flows, and historical support levels that have proven significant in past cycles.

"We see very strong support within this range and our base case assumes BTC bottoms near ~$65k," the analysts explained, pointing to data showing that 7% of Bitcoin owned by long-term holders—those who have held for six months or more—was acquired in the $60,000-$68,000 zone.

This cohort of patient investors has historically provided a floor for Bitcoin during selloffs, as they're less likely to capitulate compared to recent buyers who are underwater on their positions.

The $70K-$80K "Air Pocket"

While Compass Point sees strong support below $68,000, they warn that the current trading range between $70,000 and $80,000 represents an "air pocket" with relatively little structural support.

Bitcoin currently trades around $78,748 as of Tuesday morning, having recovered modestly from weekend lows. However, the lack of meaningful accumulation in this price band means further downside toward the analysts' target zone remains possible if selling pressure persists.

The recent breakdown that saw Bitcoin briefly trade below $75,000 highlighted this vulnerability. Following the weekend crash, the cryptocurrency has struggled to regain momentum, with each bounce met by renewed selling as traders who bought at higher levels look to exit positions.

ETF Investors Underwater

A major factor weighing on near-term sentiment is the deteriorating position of Bitcoin ETF holders. According to Compass Point's analysis, over 50% of assets under management in spot Bitcoin ETFs are now underwater following the recent selloff.

The firm notes that Bitcoin ETFs have recorded $3 billion in net outflows since January 15, as both retail and institutional investors have reduced exposure amid market weakness. The weekend low of $74,532 corresponded closely with the average cost basis for ETF investors, a psychologically significant level.

"With over 50% of ETF AUM now underwater, we see risk that outflows remain elevated while ~$81-83k becomes overhead resistance," Engel and Donovan wrote.

This dynamic creates a potential headwind for recovery. As Bitcoin approaches the $81,000-$83,000 range, investors who have been holding losses may view it as an opportunity to exit at breakeven or reduce their exposure, creating selling pressure that could cap upside moves.

Long-Term Holders Provide Foundation

Despite challenges facing shorter-term investors, Compass Point draws comfort from long-term Bitcoin holders who demonstrated conviction during past cycles. The $60,000-$68,000 range represents where significant accumulation occurred during 2024's consolidation, creating a "support zone" where buying interest tends to overwhelm selling.

On-chain data shows long-term holder supply remained stable even as prices declined from October's $126,000 peak, suggesting conviction among experienced investors who view current prices as attractive.

What It Means for Investors

For long-term holders willing to weather volatility, the analysis suggests the risk-reward setup may be improving. If Bitcoin establishes a floor in the low-$60,000s, it would create a foundation for the next cycle.

However, traders face challenges. Overhead resistance from underwater ETF holders, ongoing outflows, and macro uncertainty mean Bitcoin could remain range-bound near term even if a major bottom is forming.

The key levels to watch:

• Support: $65,000 (base case bottom), $60,000 (lower bound)
• Resistance: $81,000-$83,000 (ETF breakeven), $90,000 (psychological)
• Current: $78,748 (vulnerable to further downside)

Institutional Perspective Matters

The significance of the Compass Point analysis lies in the institutional perspective it provides. As traditional finance analysts apply research methods to crypto markets, their frameworks carry weight with the ETF investors whose behavior currently drives price action.

If institutional consensus forms around Bitcoin approaching a cyclical bottom, it could stabilize sentiment and reduce panic selling. The "final innings" metaphor offers measured optimism: the game isn't over, but Bitcoin may be closer to the end of its decline than the beginning.

Data Sources: CoinDesk, Compass Point Research, Coinglass, CoinGecko