Silent bear market is here! Bitcoin sees its worst single-week performance since the FTX collapse, bigger declines may still be ahead.

Bitcoin fell below $60,000 last Friday, reaching its lowest level since October 2024, with a cumulative decline of over 50% from its all-time high of over $126,000 last year. At the same time, Bitcoin fell by 16% last week, marking its worst single-week performance since the collapse of Sam Bankman-Fried's cryptocurrency exchange FTX in 2022. Investors are withdrawing funds from Bitcoin exchange-traded funds (ETFs), technical indicators are weakening, and interest rate expectations are changing. Although the current cryptocurrency winter is milder compared to previous ones, it may also indicate that the worst phase is yet to come. Griffin Adden, co-founder of multi-asset management firm Primal Fund, said, "I think there is still room for further decline. We still have a ways to go before we truly hit bottom." Recent selling of Bitcoin is partially attributed to Strategy selling a small amount of its Bitcoin holdings. This move by the world's largest corporate Bitcoin holder breaks its previous narrative of "never selling Bitcoin." Although Strategy attempted to stabilize market sentiment on Monday by purchasing around 1.01 billion USD worth of 1550 Bitcoinsfar higher than the previously sold $2.5 million worthmarket confidence may not easily recover. Technical signals are also deteriorating. Last week, Bitcoin fell below the 200-week moving averagea key indicator of market support for many traders. Breaking this level often intensifies caution, as it indicates that the market is more likely to face selling pressure on rebounds rather than attracting buying interest. Adden stated that during true market bottom phases, long-term options typically show a more bullish trend, which is not evident at the moment. In the meantime, investors have already begun to waver. The US spot Bitcoin ETF has seen net outflows for 13 consecutive trading days with a total outflow of around $5.5 billion. Paul Howard, senior director at cryptocurrency trading company Wincent, referred to the current market conditions as a "silent bear market" due to the absence of major collapse events like FTX. Howard said, "Breaking below the 200-week moving average provides a key confirmation signal that the market may have entered a bear market phase." He added that given Bitcoin's high volatility, "this rebound is unlikely to last." Changes in interest rate expectations are also part of the issue. The unresolved US-Iran war and strong US job data have shifted market expectations from Fed rate cuts to possibility of rate hikes. As expectations for rising borrowing costs strengthen, funds are being withdrawn from high-risk speculative assets such as cryptocurrencies. Rajiv Soni, head of international portfolio management at digital asset management firm Wave Digital Assets, said, "This is a major reversal in expectations." Soni also pointed out that with funds flowing from cryptocurrencies to artificial intelligence and technology companies, the previously positive correlation between Bitcoin and the US stock market has weakened. However, even if the stock market experiences a downturn in the future, he does not believe that funds will flow back into the cryptocurrency market on a large scale. Nevertheless, the magnitude of Bitcoin's current adjustment is weaker than in previous cryptocurrency winters. Bitcoin has retreated by about 50% from its peak, whereas previous bear markets often saw declines close to 80%. After peaking in 2021, it took Bitcoin over a year to truly hit bottom, followed by another 15 months to return to its high. Therefore, some traders are hesitant to conclude that the cryptocurrency market has already hit bottom. Hayden Hughes, managing partner at investment firm Tokenize Capital, said that companies like Strategy, the digital asset reserve company, are creating "a special kind of risk" for the cryptocurrency industry. These companies hold a large amount of cryptocurrency. If financing tightens or stock prices drop, they may be forced to sell assets. Hughes stated that the stock market may face systemic risks in the coming months, which could further transmit to the cryptocurrency market. He mentioned that though the current decline in Bitcoin has not reached historical bear market levels yet, the key word is "yet," indicating that Bitcoin still has potential for further decline.