Crypto Bear Market Nearing End with $60K as Key Bitcoin Support Level, Say Compass Point Analysts
As the cryptocurrency market struggles through a challenging phase, analysts at Compass Point suggest that the crypto bear market is approaching its final stages. Their recent report highlights a critical support zone for Bitcoin (BTC) between $60,000 and $68,000, where the major digital asset is likely to find a bottom—provided broader equity markets do not enter a bear phase.
Bitcoin’s Stabilizing Support Amid Market Turbulence
According to Ed Engel and Michael Donovan, analysts at Compass Point, Bitcoin may soon stabilize around the $60,000 to $68,000 range, citing strong conviction from long-term holders within this price band. "We see very strong support within this range and our base case assumes BTC bottoms near ~$65k,” the report states, noting that approximately 7% of Bitcoin owned by investors holding for six months or longer was acquired between these levels in previous cycles.
Bitcoin’s price recently slipped below $81,000 to lows near $74,532 over the weekend, hitting what Compass Point identifies as the average cost basis for Bitcoin Exchange-Traded Fund (ETF) investors and the broader market. The analysts note that since mid-January, Bitcoin ETFs have suffered net outflows of $3 billion. With over half of the ETF assets under management currently underwater, these outflows could continue, making the $81,000 to $83,000 range a significant overhead resistance level.
“While near-term risk remains skewed to the downside, we believe we’re approaching the final innings of the crypto bear market,” Engel and Donovan wrote, adding that further declines beyond this support would likely require a major downturn in U.S. equities.
Risks and Structural Weakness in the $70K to $80K Range
The price corridor between $70,000 and $80,000 is described by the analysts as an “air pocket,” a zone lacking meaningful structural support. Less than 1% of long-term Bitcoin holders purchased during this range, suggesting a scarcity of strong buying interest. This absence of foundational support raises the potential for increased selling pressure if prices linger or attempt to recover in that band.
Potential for Deeper Decline Only Under Severe Market Stress
Should Bitcoin break below the $60,000 to $68,000 support zone, Compass Point indicates that a further drop toward $55,000 is plausible, but only under unprecedented risk-off conditions similar to those seen during the 2022 crypto bear market. That downturn was exacerbated by a simultaneous U.S. equity bear market and a series of high-profile crypto bankruptcies, pushing Bitcoin below its historical average cost basis. The current average cost basis is near $55,000, marking a crucial technical level for the market.
Regulatory progress and recent signs from funding rates suggest that the market could be near a cyclical bottom, but continued caution remains warranted. The interplay between crypto markets and broader financial conditions, particularly U.S. equities, will remain a key factor influencing Bitcoin’s price trajectory in the near term.
Conclusion
While Bitcoin and the wider crypto market have faced significant hurdles, the outlook from Compass Point’s analysts offers cautious optimism that the bear market may be nearing its end. With strong support expected in the $60,000 to $68,000 range and a potential bottom around $65,000, crypto investors will be watching both crypto-specific developments and broader equity markets closely. A sustained bear market in U.S. stocks would likely be necessary to push Bitcoin significantly lower, underscoring the interconnected nature of risk assets in today’s financial landscape.
For ongoing updates on Bitcoin and the crypto market, stay tuned to CoinDesk and subscribe to our newsletters.