Bitcoin (BTC) has entered a structural zone that more closely resembles early bear market conditions seen in 2018 and 2022 than a routine mid-cycle correction, according to a new CryptoQuant report analyzing the cryptocurrency's Combined Market Index, with the metric falling into the low 0.2 range after sitting near the 0.5 equilibrium level as recently as October.
What Happened: Key Index Signals Structural Shift
CryptoQuant's Bitcoin Combined Market Index, or BCMI, aggregates valuation metrics such as MVRV, profitability indicators like NUPL, spending behavior via SOPR, and broader sentiment measures into a single composite reading.
The index declined from approximately 0.5 in October — a zone generally interpreted as equilibrium between bullish and bearish forces — to the low 0.2 range without producing the type of expansion reset typically seen during healthier corrections.
That pattern diverges from past mid-cycle cooling periods. It increasingly mirrors transitions into risk-off environments.
Historical data shows previous cycle bottoms formed when BCMI reached approximately 0.10–0.15, as observed in 2019 and during the 2022–2023 bear phase.
Current readings remain above those capitulation levels, suggesting that while Bitcoin may already be operating within a bearish framework, full capitulation has not yet arrived.
On the weekly chart, BTC has lost the $70,000 level and retreated toward the mid-$60,000 range. The $60,000–$62,000 zone now stands as a critical support area, aligning with prior consolidation phases and high-liquidity trading zones that historically attracted demand.
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Why It Matters: Capitulation Threshold Still Ahead
The BCMI's decline into the low 0.2 range reflects a convergence of negative signals — shrinking unrealized profits, rising realized losses, deteriorating sentiment, and ongoing valuation compression. Unless the index stabilizes and reclaims the 0.4–0.5 zone, CryptoQuant's analysis indicates the probability of continued structural weakness remains elevated.
Recent price declines have been accompanied by elevated trading volume, which analysts typically associate with distribution or forced deleveraging rather than gradual profit-taking.
Bitcoin's near-term direction remains closely tied to liquidity conditions, institutional flows, and broader macroeconomic sentiment affecting risk assets.