Concerns about a bear market are growing as Bitcoin ETF outflows ramp up dramatically alongside the ongoing volatility. Other hopes, like state-level Bitcoin Reserves, are failing, and it’s difficult to find a clear bullish trend.

Industry experts like Arthur Hayes predict that any losses will be temporary, with a fierce rebound by the end of the year. However, this would be the first major price collapse since ETF approval and institutional adoption, and non-crypto-native investors could behave in unpredictable ways.

Is Bitcoin Headed for a Bear Market?

Bitcoin, the world’s first and largest cryptocurrency, has been on a downward price trajectory lately. Strategy (formerly MicroStrategy) saw a huge drop in stock price despite spending nearly $2 billion on the asset, and broader economic headwinds are having a real dampening effect.

A few worrying trends are building speculation about a Bitcoin bear market:

“Bitcoin goblin town incoming: Lots of IBIT holders are hedge funds that went long ETF [and] short CME futures to earn a yield greater than where they fund, short term US treasuries. If that basis drops as BTC falls, then these funds will sell IBIT and buy back CME futures,” claimed Arthur Hayes, former CEO of BitMEX.

Hayes also referenced his earlier prediction from January that the asset was set for a price drop to $70,000. This bear market will not last forever, he claimed, and Bitcoin would rebound by the end of the year, but it would face significant pain first.

Hayes’ predictions centered around the US Bitcoin ETF market, which has been facing its own pressures.

These ETFs are indeed showing signs of a bear market, caused by one simple correlation: the tendency of Bitcoin to decline alongside traditional stocks.

Even though there is a huge appetite for institutional investment, it’s very shallow in some ways. If BTC’s potential returns diminish, investors will look elsewhere, as evidenced by substantial outflows.

These one-day outflows total over $500 million from the top 10 ETFs alone. Last week, however, the entire market had $585 million in outflows, the worst level in five months.

If ETF outflows keep accelerating at this dramatic pace, a Bitcoin bear market seems very likely.

Bitcoin Reserve Hopes Fail, Deflating Enthusiasm

Another factor might cause additional downward pressure if political developments don’t live up to hopes. Specifically, many US states launched efforts to enact Bitcoin Reserves, which would trigger up to $23 billion in BTC purchases.

However, some Republican members themselves are defeating these efforts nationwide. With its other setbacks, can Bitcoin bear a major disappointment here?

In short, many factors are making a Bitcoin bear market seem like a credible prospect. However, the industry is no stranger to harsh price fluctuations. Hayes and other commentators have claimed that it will be temporary at best, with a rebound by the end of 2025.

The only question, then, is how a non-crypto-native investor class will deal with these cyclical patterns. Since the Bitcoin ETFs were approved in 2024, the industry has yet to face a genuine bear market on par with previous collapses.

Institutional investors have recently poured billions into crypto, but it’s uncertain how they will deal with the volatility inherent in this industry.

Onyxcoin (XCN) has extended its losing streak, plunging another 22% in the last 24 hours. It now trades at a 30-day low of $0.015.

With a growing bearish bias toward the altcoin, its price may continue to drop. This analysis explains why. 

Onyxcoin Traders Remain Bearish

XCN’s persistent negative funding rate is a major indicator of the bearish bias against it. According to Coinglass, the altcoin’s funding rate has been predominantly negative since December 9. At press time, this stands at -0.17%. 

The funding rate is a periodic fee exchanged between long and short traders in perpetual futures contracts to keep prices aligned with the spot market. When it is negative, short traders are paying long traders. This indicates that most XCN traders are bearish and expect further price declines.

In addition, XCN’s open interest has been in a downward trend, highlighting the poor demand for the altcoin among market participants. Per Coinglass data, as of this writing, it stands at $6 million, marking its lowest level in 30 days.

An asset’s open interest measures the total number of its outstanding derivative contracts, such as futures or options, that have not been settled. When it falls alongside the asset’s price, as in XCN’s case, it indicates weakening market participation, with traders closing their positions rather than opening new ones.

This indicates that XCN’s price decline is driven by liquidation or profit-taking rather than fresh short-selling, reducing the likelihood of a sharp short-term rebound.

Bearish Clouds Loom Over XCN

On the daily chart, XCN trades below the Leading Spans A and B of its Ichimoku Cloud indicator. This momentum indicator measures an asset’s market trends and identifies potential support/resistance levels. When an asset falls below this cloud, the market is in a downtrend. 

In this case, the cloud acts as a dynamic resistance level for XCN. It confirms the likelihood of its continued price decline as long as the price remains below the cloud and demand continues to drop. If this trend persists, XCN’s value could dip to $0.011.

On the other hand, if buying activity resumes, XCN’s value could rocket to $0.022.

Pi Coin has faced a tumultuous period following its mainnet launch last week. After the launch, the altcoin suffered a massive crash, losing 99% of its value in just four days. 

While it has shown signs of recovery, the damage remains significant, and the token still struggles to regain lost ground.

Pi Coin Has Some Challenges Ahead

The Chaikin Money Flow (CMF) indicator has shown a dramatic fluctuation in Pi Coin’s market sentiment over the past week. Investors sold heavily following the mainnet launch, causing the CMF to drop. However, others took advantage of the low prices, causing a sharp spike in inflows.

This is evident in the spike in the indicator. Despite these inflows, a true bullish confirmation will occur when the CMF crosses the zero line, signaling sustained positive momentum and investor confidence in Pi Coin’s recovery.

Pi Coin’s recovery is still in its early stages, with the market sentiment showing mixed signals. The volume of inflows indicates some investors believe in the altcoin’s potential, but the indicator’s failure to consistently stay above the zero line suggests that the bullish momentum is not yet fully established. The token will need to see consistent buying pressure for the price to build momentum and for investor confidence to stabilize.

Pi Coin is also facing strong macro headwinds in the form of a bearish crossover. The Moving Average Convergence Divergence (MACD) has been observing a bearish crossover over the past 36 hours, which typically signals that further downward price action is likely. 

The market is under pressure, and Pi Coin’s price action reflects these broader trends. However, if the gradual recovery remains persistent and Pi Coin manages to generate a stronger interest among investors to boost the inflows, the altcoin could witness a bullish crossover. This would signal potential recovery ahead, confirmed by the bars on the histogram flipping above the neutral line.

Pi Coin Price Recovery May Take A While

At the time of writing, Pi Coin is trading at $1.56 after a 116% bounce over the weekend. Despite this brief recovery, the prevailing bearish signals point to the possibility of further decline. While the altcoin did chart an all-time high (ATH) of $1.72, it is closer to the support of $1.43.

Given the current market outlook and the technical indicators, it is likely to fall through this support soon and slip towards the support of $1.19. If not, the altcoin could continue to consolidate under $1.72, facing persistent downward pressure from both the bearish crossover and broader market negativity.

For Pi Coin to actually break out, it would need stronger support from the investors, a breach of the $1.72 barrier, a move to $2.00 and higher, and continued formation of new ATHs. This would be a significant turnaround and invalidate the current bearish outlook.