Bitcoin appears to be approaching a potential bottom in its current downturn, but analysts at Compass Point say a meaningful move lower would likely require a broader bear market in U.S. equities.
“While near-term risks remain tilted to the downside, we believe the crypto bear market is nearing its final stages,” Compass Point analysts Ed Engel and Michael Donovan said in a report published Monday. “Additional downside would likely be driven by a U.S. equity bear market.”
The firm’s base-case scenario calls for bitcoin to find a floor between $60,000 and $68,000, a range that has historically attracted buying from long-term holders. On-chain data shows that roughly 7% of bitcoin held by investors with holding periods of six months or longer was accumulated within that band. Compass Point’s central estimate places the bottom near $65,000.
Bitcoin recently broke below $81,000 and slid to a weekend low of $74,532, a level the analysts said aligns closely with the average cost basis for both bitcoin exchange-traded fund investors and the broader market. Since Jan. 15, bitcoin ETFs have recorded about $3 billion in net outflows. With more than half of ETF assets now underwater, Compass Point warned that redemptions could remain elevated, while the $81,000–$83,000 range may now cap near-term rallies.
The analysts also flagged a lack of meaningful support between $70,000 and $80,000, describing the zone as an “air pocket.” Less than 1% of long-term holder supply was accumulated in that range, increasing the risk of continued selling pressure if prices weaken further.
If bitcoin were to break decisively below the $60,000–$68,000 support zone, Compass Point said the next potential downside level would be around $55,000—but only under more extreme conditions. Historically, bear-market bottoms have occurred below the average cost basis of all bitcoin holders, which currently sits near $55,000.
However, the analysts noted that breaching that level has typically required significant external stress. During the 2022 downturn, bitcoin fell below its average cost basis only after a U.S. equity bear market combined with multiple high-profile crypto bankruptcies.
