Down the Rabbit Hole: How Deep Does Bitcoin's Bear Market Go?

Bitcoin sits precariously in familiar territory—currently trading around $65.46K with a 2.81% decline over the past 24 hours—yet beneath this seemingly stable surface lies a question that separates the cautiously optimistic from the genuinely concerned: How much further down the rabbit hole can this bear market descend? While the $60K–$70K range might look like solid ground, a growing number of analysts are warning that appearances can be deceiving.

The Surface Level: Stability or Mirage?

For the past 12 days, Bitcoin has clung to the $60,000–$70,000 band following a sharp selloff in early February. To casual observers, this range-bound behavior signals stabilization—perhaps even a cycle bottom in the making. But zooming in reveals the trap: mistaking sideways price action for genuine support. The real question isn’t whether Bitcoin is holding above $60K. It’s whether that support can withstand what’s coming.

Volatility: The First Warning Sign in the Rabbit Hole

Willy Woo, one of the crypto space’s most respected on-chain analysts, pulls back the curtain on what many are missing. His focus isn’t on price—it’s on volatility, a metric institutional investors track with religious fervor. Bitcoin officially entered bear market territory when volatility spiked sharply upward, a signal that trend shifts are underway. Here’s where the rabbit hole gets deeper: volatility hasn’t stopped climbing since that initial spike.

Historically, bear markets don’t bottom out on the first volatility peak. Instead, the true macro low often emerges at the second or third volatility spike—a process that can stretch across many months. Woo painted a troubling picture of how this could unfold. If global equity markets deteriorate further, Bitcoin could trigger a second bear phase. The final phase? Peak capital outflows from crypto altogether. In other words, $60K isn’t a floor—it’s just the first step deeper into the rabbit hole.

What On-Chain Data Really Reveals About Accumulation

Glassnode’s Accumulation Trend Score provides the next layer of insight. This metric tracks whether major market participants are buying or selling in aggregate. Readings near 1 (shown as darker shades) signal aggressive accumulation by large players—historically, the hallmark of market bottoms. Remember post-LUNA and post-FTX? Those environments saw heavy buying eventually arrest the decline.

Today’s reading, however, remains ambiguous. For the $60K–$70K zone to function as a genuine floor, it needs to attract the kind of aggressive institutional buying that characterized those prior recoveries. Without that conviction from big players, another leg lower cannot be ruled out. The on-chain signals aren’t yet screaming “bottom is in”—they’re whispering “wait and see.”

The Options Market’s Contrarian Signals

Not all market participants are bracing for deeper declines. According to Aurelie Barthere, Principal Research Analyst at Nansen, the options market tells a different story—at least for now. Call options have outpaced put buying over the past week, particularly in block trades typically executed by professional investors. Most intriguing? The most popular strike price sits at $75,000, well above the current consolidation range.

This setup suggests a portion of the market is positioning for a breakout rather than a breakdown. But here’s the catch: whether that bullish positioning translates into actual price movement depends entirely on whether buyers step in decisively if Bitcoin tests the lower end of its current band. One decisive wall of buying; one missed opportunity—and the market’s trajectory diverges sharply.

Macro Risks: The Deeper Layers of the Rabbit Hole

Beyond charts and derivatives lies the broader macro environment—arguably the rabbit hole’s deepest levels. Barthere flagged several critical catalysts that must align for a durable recovery to take shape: concrete progress on the U.S. CLARITY Act for crypto regulation, outcomes from upcoming political developments, and a broader shift toward risk-on sentiment across global markets.

Until these factors clear, even a short-term bounce toward $75K may struggle to evolve into a sustained trend reversal. The macro backdrop remains cloudy, and uncertainty tends to weigh heavily on speculative assets like Bitcoin.

Finding Your Way Out: Critical Levels to Watch

The $60,000 level remains the critical threshold. Aggressive buying at that price—evidenced by improving on-chain accumulation scores—would validate the bull case. Failure to defend it opens the door to the second bear phase Willy Woo described, potentially dragging Bitcoin deeper down the rabbit hole.

For now, the market stands at a genuine crossroads. Options traders are cautiously optimistic, their $75K bets reflecting conviction that a bounce is coming. Yet the structural indicators—volatility patterns, ambiguous on-chain data, macro headwinds—suggest that patience and skepticism may serve traders better than bullish conviction. The rabbit hole’s depth remains unknown, but the clues suggesting further descent are difficult to ignore.