Bitcoin Entered Technical Bear Market in November with Potential Floor at $56,000

2026-01-03 economy

New York, Friday, 2 January 2026.
Technical indicators confirm Bitcoin entered a bear market in November, with historical data projecting a potential floor near $56,000—a shallower drawdown compared to previous cycles.

Technical Breakdown of the Shift

Bitcoin’s market structure underwent a decisive shift in early November 2025, marking the start of a technical bear market [1]. According to Julio Moreno, Head of Research at CryptoQuant, the primary confirmation for this transition was the asset’s price falling below its one-year moving average, a critical trendline that had previously supported the bull run [1][7]. As of Friday, January 2, 2026, Bitcoin is trading between $87,255 and $88,543, having closed the 2025 fiscal year below the psychological support levels of $90,000 and $100,000 [1][4]. The CryptoQuant “Bull Score Index,” which tracks network activity and liquidity, also flipped bearish in early November and has yet to recover, signaling that the momentum has fundamentally stalled [1][7].

Projecting the Market Floor

Current analysis projects a potential market floor between $56,000 and $60,000 later in 2026 [1][7]. This target is derived from the “realized price,” a metric representing the average on-chain purchase price of all circulating coins [1]. Moreno notes that during previous bear cycles, prices have historically corrected toward this realized value following extended periods of upside deviation [1]. If Bitcoin were to retrace from its October 2025 peak of $126,080 to the $56,000 level, it would represent a drawdown of approximately -55.584 percent [1][7]. While significant, this projected decline is notably less severe than historical precedents, which have witnessed crashes ranging from 70% to 80% [1][7].

Alternative Scenarios and Macroeconomic Headwinds

Despite the bearish technical confirmation, alternative models suggest the possibility of a consolidation phase rather than a deep crash. A “high probability” scenario outlined by CryptoQuant forecasts Bitcoin trading within a broad range of $80,000 to $140,000 throughout 2026, driven by intermittent capital flows [2][3]. Conversely, a deepening recession risk could push prices below the $80,000 mark toward $50,000 [3]. Market participants are closely watching the $86,500 level, which represents the average cost basis for spot Bitcoin ETF buyers and serves as a crucial line of defense [4]. U.S. spot Bitcoin ETFs have recorded over $56 billion in cumulative net cash inflows, suggesting this support level is well-positioned to hold [4].

Sources

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